4 ms·

Well, if they use financial gains to buy crap, then the seller of that crap benefits. Then the 'crap' market changes-demand decreases. If they want to sell crap

by bawana 8y ago

Well, if they use financial gains to buy crap, then the seller of that crap benefits. Then the 'crap' market changes-demand decreases. If they want to sell crap - it wont be a small loss. And they cannot 'short' against buying crap. To make up for their 'crap' loss, they'll need to make more profit. And anyway, there are people who have to sell the crap, people to buy the crap, and people in between each transaction - more jobs.

icebraining 8y ago
Currently some importer makes a profit from buying desktop fans in China or Vietnam, and selling them in the US and EU. Say the finance investors just use their Finance Bucks to buy those fans themselves, pay that importer to ship them and then they sell them to the companies that were already buying the fans from the importer, getting Real Bucks back. Literally nothing in the real world changed, except the importer now gets a bit of extra cash (probably almost nothing, since it doesn't cost him/her anything) to allow those investors to "own" those fans en route. There's no extra jobs, and the demand for fans hasn't really changed. What's the point?
- bawana 8y ago
  Well, the importer who would have spent his money on the fans now spends it on something else. The Finance bucks are now recirculated into the REAL economy.
  - icebraining 8y ago
    They don't have that money to spend, because that money came from the sale of the previous fans, but now it's the investors that are selling them. Before: Importer spends $100 to buy the fans, spends $10 to ship, gains $150 from sale. Net: $40 Now: Finance guys spend $100 to buy the fans, pay $50.01 to the importer to ship them, then sell them for $150. Net (for the importer): $40.01. The finance guys are down $0.01, but they get Real Bucks from that. The real economy gained a mere penny. It just added complexity to the whole thing, for no real gain.

by bawana 8y ago

icebraining 8y ago

Currently some importer makes a profit from buying desktop fans in China or Vietnam, and selling them in the US and EU. Say the finance investors just use their Finance Bucks to buy those fans themselves, pay that importer to ship them and then they sell them to the companies that were already buying the fans from the importer, getting Real Bucks back. Literally nothing in the real world changed, except the importer now gets a bit of extra cash (probably almost nothing, since it doesn't cost him/her anything) to allow those investors to "own" those fans en route. There's no extra jobs, and the demand for fans hasn't really changed. What's the point?

bawana 8y ago
Well, the importer who would have spent his money on the fans now spends it on something else. The Finance bucks are now recirculated into the REAL economy.
- icebraining 8y ago
  They don't have that money to spend, because that money came from the sale of the previous fans, but now it's the investors that are selling them. Before: Importer spends $100 to buy the fans, spends $10 to ship, gains $150 from sale. Net: $40 Now: Finance guys spend $100 to buy the fans, pay $50.01 to the importer to ship them, then sell them for $150. Net (for the importer): $40.01. The finance guys are down $0.01, but they get Real Bucks from that. The real economy gained a mere penny. It just added complexity to the whole thing, for no real gain.