Floating and Fixed Exchange Rates

[Tachyon Flare]

Originally Posted by BarnacleBob

In fact over $1 trillion is traded in the currency markets on a daily basis.

Interestingly enough this estimate was true in 1992 according to the Wall Street Journal (September), roughly 1.5 trillion in 1998, 2001 3.5 trillion, 2002 around 3.7, I do not know the current estimate as of now however it can trade up to 4.5 trillion. It is estimated the average daily volume will be 6.5 trillion in 2005. To put in perspective, average daily volume for NYSE is around 40 billion. Most of the trading are with the major currencies, the less stable to dollar becomes, the exponential increase in the forex market, eventually most of the major currencies including periphery currencies will begin to short the dollar with its growing list of political and financial problems.

Dirty floats are hardly "more efficient means of determining the long term value of a currency and creating equilibrium in the international market," it is rather in always in a state of disequilibrium, majority of the transacations is used for speculative purposes hence the allocation of money (credit) is wasted. Ultimately we can blame Nixon, Treasury Secretary George Shultz and Undersecretary Paul Volcker, hell even Milton Friedman for putting this entire globe into chaos.

-Tachyon