The Role of Stock Market Speculation: DEVELOPMENT -part 5-
The commissions and other costs caused by this market over the benefits to be gained, are transformed into purchasing power to be used in the real economy. Any costs and the profits will be transformed into purchasing power for services and products in the real economy, and affect a smaller return on the investment and work in the real economy, because both costs and profits of the financial economy are transformed into purchasing power can only materialize in the real economy.
While profits remain within the financial world, the only thing that occurs is an increase of money in the financial economy, but at the time of this money goes to the real economy in the form of costs or benefits materialized, purchasing power are encroaching on the real economy, because the products and services in the real economy can not be achieved within the financial economy.
Who has money, who is rich, can obtain credit, this credit can make a profit in the financial economy and these benefits can be transformed into real purchasing power. In this way the rich are able to seize what belongs to others and therefore of the poor. No wonder the poor becoming poorer and the rich getting richer.
If the money raised by speculation and the creation of money in the financial economy can move to the real economy of goods and services, if money is no different from the other or whether they are convertible, if money is created or livestock by financial economics can be used to purchase goods and services, is cheating, is cheating, it is stealing.
The fact that this practice is not only possible but actually is legal in the world today, is just one of many failures of the current monetary system.
This problem could be solved only by implementing a responsible currency to the currency that will replace existing stock.
This is presently possible through the development of the central magnetic card accounts as the monetary authority. Only this way can eliminate financial speculation and get the socialization of the creation of money needed by the system.
credit to: Lic. Eyelin Bello Caballero, MSc. Yaicel Rangel Díaz and MSc.Eimyn Rizo Lorenzo
Source: www.gestiopolis.com/finanzas-contaduria/especulaciones-en-los-mercados-financieros.htm
image source: www.koreatimes.co.kr/upload/news/photo2.jpg