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Now Its Currency Trading -- $10 Trillion A Day Expected

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http://www.bloomberg.com/news/2010-10-27/global-currency-trading-will-grow-to-10-trillion-a-day-by-2020-ubs-says.html

Global Currency Trading Will Grow to $10 Trillion a Day by 2020, UBS Says
By Anchalee Worrachate - Oct 27, 2010 1:00 AM GMT+0100 Tweet (6)LinkedIn Share
Foreign-exchange trading will more than double to $10 trillion a day on average a decade from now, driven by portfolio diversification from central banks, pension funds, hedge funds and insurance companies, according to UBS AG.

So how is this going to be good for a stable world economy? No wonder fundamentals no longer matter--its now advanced computer momentum trading with hundreds of billions being won and lost on every pip. A few powerful banksters can harness all that money and skim who knows how much off the top of every trade and if you are talking, lets say 5TR a day currently, how much is going to be made out of thin air? This kind of dealing will make all other forms of trading redundant. Gold will be something for a few ecentric bugs in a corner somewhere as will stocks and bonds.

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More volatility just what the system needs.

What's the return on currency trading on these volumes, trade $10tr and make $10m a day? Running the risk of losing hundred million if it goes wrong?

Edited by interestrateripoff

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http://www.bloomberg.com/news/2010-10-27/global-currency-trading-will-grow-to-10-trillion-a-day-by-2020-ubs-says.html

Global Currency Trading Will Grow to $10 Trillion a Day by 2020, UBS Says
By Anchalee Worrachate - Oct 27, 2010 1:00 AM GMT+0100 Tweet (6)LinkedIn Share
Foreign-exchange trading will more than double to $10 trillion a day on average a decade from now, driven by portfolio diversification from central banks, pension funds, hedge funds and insurance companies, according to UBS AG.

So how is this going to be good for a stable world economy? No wonder fundamentals no longer matter--its now advanced computer momentum trading with hundreds of billions being won and lost on every pip. A few powerful banksters can harness all that money and skim who knows how much off the top of every trade and if you are talking, lets say 5TR a day currently, how much is going to be made out of thin air? This kind of dealing will make all other forms of trading redundant. Gold will be something for a few ecentric bugs in a corner somewhere as will stocks and bonds.

Tobin tax of 0.02 percent per transaction raises £1 each for everyone on the planet B)

Seriously I see no reason this kind of thing can be legal. Where is the profit coming from and who does this type of thing actually benefit?

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Tobin tax of 0.02 percent per transaction raises £1 each for everyone on the planet B)

Seriously I see no reason this kind of thing can be legal. Where is the profit coming from and who does this type of thing actually benefit?

Banksters!

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The £ is currently involved in 12% of the forex trading.

Assuming the market grew to £10t a day and all other things remained equal we'd see £1.2t a day traded.

With a tax of 0.002% on each transaction we'd see an income of 240m a day for the UK.

Even if it meant volumes dropped 10x we'd still see 24m day of income from a minute taxation on speculative trading of our currency.

Question must be - why does this not happen?

Edited for bad maths!

Edited by Timak

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10 trillion per day

So in the course of a regular 5 day trading week more than the entire yearly GDP of the world is traded on these fiat currency markets.

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10 trillion per day

So in the course of a regular 5 day trading week more than the entire yearly GDP of the world is traded on these fiat currency markets.

Yep. Which shows that it has absolutely nothing to do with anything other than gambling and is thus just friction on the real economy. The increased volatility engendered by all this trading must raise costs for those who actually want to move money from one country to another, as the spreads are partially determined by volatility.

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The £ is currently involved in 12% of the forex trading.

Assuming the market grew to £10t a day and all other things remained equal we'd see £1.2t a day traded.

With a tax of 0.002% on each transaction we'd see an income of 240m a day for the UK.

Even if it meant volumes dropped 10x we'd still see 24m day of income from a minute taxation on speculative trading of our currency.

Question must be - why does this not happen?

Edited for bad maths!

Why tax them .0002%, banks would charge you between 5 and 25% to borrow money typically. I'd say tax it by 10%, we could do away with most other taxes then.

Edited by jammo

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The £ is currently involved in 12% of the forex trading.

Assuming the market grew to £10t a day and all other things remained equal we'd see £1.2t a day traded.

With a tax of 0.002% on each transaction we'd see an income of 240m a day for the UK.

Even if it meant volumes dropped 10x we'd still see 24m day of income from a minute taxation on speculative trading of our currency.

Question must be - why does this not happen?

Edited for bad maths!

But the guy above says this

What's the return on currency trading on these volumes, trade $10tr and make $10m a day? Running the risk of losing hundred million if it goes wrong?

£24million is larger than £10million. Thus it would destroy any such market.

A bit like these socialists calling for 5% annual wealth taxes. 5% is probably larger than the rental yields and dividend yields on a lot of properties and shares, thus destroying the value of the wealth itself.

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But the guy above says this

What's the return on currency trading on these volumes, trade $10tr and make $10m a day? Running the risk of losing hundred million if it goes wrong?

£24million is larger than £10million. Thus it would destroy any such market.

A bit like these socialists calling for 5% annual wealth taxes. 5% is probably larger than the rental yields and dividend yields on a lot of properties and shares, thus destroying the value of the wealth itself.

Ball park guess, I've no idea how much they are making but it could be a lot less. If they are trading 24/7 then you would make what $3.65bn assuming you make $10bn a day on the trades. However the banks don't appear to be making huge profits, so it may be the case they literally are making very tiny profits on these trades, meaning it's only viable if they gamble huge sums.

LTCM comes to mind again and that worked out well....

Can anyone give any estimates to what the profit is on these sorts of trades.

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Hmmm.

I can understand FX trading volumes increase markedly under conditions like we have now where there is a race to devalue your currency and thus stiff your creditors, so UBS AG is indirectly suggesting that the next decade will be inflationary. This coincides with the world-view of many bears who think that most western governments will turn to the printing presses to pay off their huge debts. To be fair, they have a point; and a further rounds of "quantitave easing" (pardon that ridiculous euphemism) are a virtual certainty.

FX is a zero-sum game. Winner takes £/$/€ x, loser hands over the same. What you win on day 1 you're equally likely to lose on day 2. Any competitive advantage to a currency trading strategy will be arbitraged out very very quickly, I'm sure. Trading FX is purely short-term speculation; smart money will be parked in a bunch of currencies to mitigate risk without all that dodgy trading that brokerslove so much (nice commission, you see). Holding low-cost multi-currency ETFs might therefore be quite a good hedging strategy for the small investor in such an environment who doesn't want to see his.her cash savings wiped out by the chancellor's printing press.

I'm not sure that an increase in FX trade really means anything, unless large banks start selling highly-geared derivatives on risky currency positions as investment-grade structured investment products. If that happens then we're all probably going to end up with a standard of life comparable to the middle ages. Except for the banker folks, who will either (1) be lynched by the resultant Bolshevik/fascist mob or (2) be sipping 50 year-old champagne on board their 200-foot yachts moored just off the coast of Antigua.

Edited by THEBIGMAN

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  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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