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Business produces goods and services. Finance is an online multiplayer game. They are two weakly-connected systems.

• jasode 7y ago
  >Business produces goods and services. Finance is an online multiplayer game. But finance is also products & services. Think of a corn farmer. It's easier to think of him adding tangible value to society because "corn == food". In contrast, finance just seems like useless office workers copy pasting numbers around in Excel spreadsheets. (This is probably true in many cases.) But the farmer often wants to sell "futures" which is a product & service provided by the financial industry. Instead of using the jargon of "futures", we can just say the farmer wants a product/service to give him a "guaranteed-selling-price-regardless-of-future-volatility-of-corn-prices-so-I-can-sleep-at-night". Other examples of desirable finance products that farmers want include crop insurance and equipment loans/leases. >They are two weakly-connected systems. Farmers' food crops and the financial products/services of of futures is an example of how businesses making tangible products and the finance industry are strongly connected.
  • Merrill 7y ago
    Those are the weak connections I referred to. Last I looked, the volume of financial transactions was about two orders of magnitude larger than the volume of purchases of goods and services. So maybe a couple percent of futures transactions involve actual buyers and sellers of the commodity, while most trades are among financial system players.
  • penagwin 7y ago
    But for example the crypto market has no goods or services - only the market trading aspect. Yet it's value swings wildly anyway.
• dcsan 7y ago
  finance is the meta-game. "All problems in computer science can be solved by another level of indirection"