Comments on: Capitalism’s currency craziness

By: Paul Drake

Paul Drake — Thu, 18 Dec 2008 10:47:30 +0000

I pressed the submit button too soon! The above mentioned exposes those activities known as “free trade” to be an absolute lie some poor bastard is paying with hard labour.

What I would like to discuss on this post is the idea of a global currency and a fair basic wage set in that currency. What would happen to foreign investment and currency speculation?

Paul D.

By: Paul Drake

Paul Drake — Thu, 18 Dec 2008 10:30:26 +0000

Andrew; currency speculation or arbitrage turns over huge amounts of capital to the very few (thank god) who know how to work the currency exchange system. Such people are George Soros and our very own John Key.
Soros has admitted to revealing a very dangerous flaw to this system.

What Philip was talking about makes a lot of sense, Marx teaches that the basic value of all goods especially manufactured goods is the basic value of labour + the value of the raw materials and overheads etc.( In capitalism that includes profit)

Therefore (correct me if I am wrong) the sum total of the above values decides the value of those currencies it has to because why are currencies at differing values in the first place?

Apart from arbitrage (also by means of arbitrage) capitalists are always chasing countries with cheap labour and cheap currency in which to invest. In this country we all know the capitalists who go off shore to invest in the the cheap labour market causes many of the closures in our facturies.

By: Andrew

Andrew — Fri, 12 Dec 2008 16:13:21 +0000

Your currency arbitrage example is a lovely thought by would in reality rarely, if ever happen. I will give you $1000 right now if you can show me a triangular arbitrage that would make me 20% in a triangular transaction. If that were the case everyone would be doing it all the time, hell you would be doing it right now.

In reality, these examples can exist through market imbalences, though we are talking about a few percetage points, not 20%. These loopholes rarely exist for long and exposure to market risk means that as currencies fluctuate the deal can go bad as well as good.

There are people, however that make a heck of a lot of money with trades like these, but all i am pointing out is that you make it all sound so easy when in fact is is very complex and many people loose millions as well as make millions from it.