Throughout history there have been varying degrees of business transactions in many parts of the globe with the most distinguishing being the barter transaction. In this type of transaction, two merchants,one buyer and one seller, get together in a bazaar to talk trades. One of the merchants says he has a prime goat for sale and he is willing to trade the goat for a cattle the other merchant has available. After a thorough inspection of both animals, the two merchants agree to a trade. What is important and lacking in these types of transactions is currency exchange. As a rule in todays world, transactions like these are very rare mainly because of the evolution of the complex nature of a modern market like currency transactions and market transactions of the currencies themselves. Each business day trillions of Euros, for example, are traded online in bourses ranging from Paris to Frankfort in milliseconds. The Japanese Yen, a currency staple in the mid to late 1980s due to the rapid expansion of the Japanese economy then, is openly traded in US markets in Chicago as well as New York. Currency trading today is fraught with risk because these transactions are tied directly to todays global geopolitical problems. If a market moving event involving Bangladeshs lax building codes in many of its factories as well as wages that are substandard in East Asia, currency markets will automatically and over the long haul punish a basket of currencies if corrective measures are not immediately made available. In order to try to limit currency geopolitical risk, some currency analysts have floated the one world currency idea as a means to counteract the volatile nature of currency trading pointing to the online currency the bitcoin as one way to achieve this goal. In any event, solutions to the instantaneous and volatile nature of currency must be made right away or todays barter economy, currently worth billions, will continue to grow.
Posted on: Wed, 19 Mar 2014 12:09:59 +0000
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