Financial Speculation and Its Implication -part 2-
We must also bear in mind that the stock exchanges, economic thermometers are true: if the economy is doing well, the prices go up, when it goes wrong or a company has problems, the values fall, as their owners want to sell all costs before fall more.
In recent years, financial systems have been undergoing momentous changes and institutional innovations have appeared in the money and capital markets have a decisive influence in its operation. Untying the international monetary system on gold, the development of unregulated offshore markets credit and securities, derivatives trading, etc., have greatly increased the liquidity of financial markets, forcing central banks to change their strategies to achieve the objectives of monetary policy and even changing the scale of priorities of these goals [1]. Continue reading