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The Forex markets ......

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Re: The Forex markets ......

Postby Pyrpolizer » Fri Feb 24, 2017 6:11 pm

The VAT paid by a merchant is a plus and minus figure.The one who actually pays it is the consumer/or the end user of the product, and in these transactions there is no consumer and no end user. (end user or consumer means the one who depreciates the value of a product down to zero). So if applied on Forex transactions the net amount of VAT payable by the speculators will always be zero. So no a VAT on those transactions is meaningless as it it will collect a big zero sum.

A direct tax on Forex transactions yes, it is applicable, but you cannot exclude from that very same tax, the transactions made for real buying of foreign goods and services. Eventually it will have another zero sum effect on speculating transactions because the speculator would either sell his money to buyers of real goods and services or to other speculators.The tax you impose will just be part of the value of the forex money.
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Re: The Forex markets ......

Postby Maximus » Fri Feb 24, 2017 7:28 pm

Robin Hood wrote:
Maximus wrote:Robin, this Tobin tax you are talking about would it be on profit or turnover? Why not just ban it if you want to put people out of business?

Why not just peg every currency to every other currency and screw nations over like the euro is doing to the nations that adopted it?


It's a great idea and, until the last couple of decades or so, speculators were not that much of a problem.

The speculators were quite a minor cause of the currency fluctuations but now most of the fluctuations are caused by 'traders', in fact not even traders ...... it is mostly down to computers and algorithm's. So trading is not quite as I presented it ...... buying and selling is often automatic and the values change thousands of times a second! The trader just enters how much he wants to gamble ...... and a computer then makes the decisions! Quite frightening really ..... but it's the way the world works these days ..... unfortunately for us. :wink: d

One reason governments and the big banks are so opposed to Bit Coin as I understand it. They are not subject to quite the same trading pressures as currency and are more stable, a bit like gold but even then the prices can be manipulated. :x


So what is the alternative idea? You give me a playstation and 10 DVD's and Ill give you an oven? Imagine if we had to carry that around all day, finding the right person who's carryong the toaster nthat you want. I cant see it working. There must be some other, faster and more convinient medium for transaction.

Those exchanges where you can truely trade bit coin have been hacked and 'currency' has been stolen out of peoples e-wallets. The most secxurity you have got is a file on your computer that contains your e-wallet. The reason why banks and governments are opposed to crypto currency is because they cant control it, or control the people using it but those people using it have to cash out to some other currency at some point. Its just another underground banking system / payment method running parallel to the banks.
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Re: The Forex markets ......

Postby Maximus » Fri Feb 24, 2017 7:37 pm

I have said it before, the major players in the forex market are commercials and governments. Their trade has to go through banks, in other countries and sometimes has to be exchanged to different currencies to get to its destination. The destination is to pay for the goods or services of someone else.

Its basic economics in a technologically advanced world.

Most speculative forex transactions do not even make it to the market in the first place. It depends on the brokers business model.
Last edited by Maximus on Fri Feb 24, 2017 7:41 pm, edited 2 times in total.
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Re: The Forex markets ......

Postby Robin Hood » Fri Feb 24, 2017 7:39 pm

Pyrpolizer wrote:The VAT paid by a merchant is a plus and minus figure.The one who actually pays it is the consumer/or the end user of the product, and in these transactions there is no consumer and no end user. (end user or consumer means the one who depreciates the value of a product down to zero). So if applied on Forex transactions the net amount of VAT payable by the speculators will always be zero. So no a VAT on those transactions is meaningless as it it will collect a big zero sum.

A direct tax on Forex transactions yes, it is applicable, but you cannot exclude from that very same tax, the transactions made for real buying of foreign goods and services. Eventually it will have another zero sum effect on speculating transactions because the speculator would either sell his money to buyers of real goods and services or to other speculators.The tax you impose will just be part of the value of the forex money.


Yes, you are right ..... VAT was a bad example. But Forex has no end user it is an endless loop, there is no consumer only an intermediary ...... 'trader'.

But you can exclude transactions from normal commercial buying of goods and services, simply because there is an end consumer when you convert money into goods ..... the goods represent something of value. Swapping currency for currency does not transfer wealth it converts one currency into another. Forex money has no intrinsic value it is simply numbers in an account, that can be taken out and converted to wealth. It's like an ATM that never needs refilling because it can reproduce its own currency within itself. It is a perpetual loop that adds (or subtracts) to itself on every transaction. :|
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Re: The Forex markets ......

Postby Robin Hood » Fri Feb 24, 2017 8:02 pm

Maximus:
So what is the alternative idea? You give me a playstation and 10 DVD's and Ill give you an oven? Imagine if we had to carry that around all day, finding the right person who's carrying the toaster that you want. I cant see it working. There must be some other, faster and more convenient medium for transaction.

But the difficulty in the swapping of goods was what led to the idea of currency in the first place, just as you say swapping say oil for grain becomes a bit unwieldy. Russia and Iran have just done a deal where the Iranians supply Russia with oil and in return Russia supplies them with technical ‘stuff’. They must obviously have a form of currency to relate the value of one to the other.
Those exchanges where you can truely trade bit coin have been hacked and 'currency' has been stolen out of peoples e-wallets. The most security you have got is a file on your computer that contains your e-wallet. The reason why banks and governments are opposed to crypto currency is because they cant control it, or control the people using it but those people using it have to cash out to some other currency at some point. Its just another underground banking system / payment method running parallel to the banks.

You are absolutely right because any system has weaknesses, all that can be done is to reduce the chances of someone exploiting the system, whatever it is. Money/currency is simply a means of transferring wealth from one place to another, in my mind using money to make money without creating wealth is an iniquity that only the speculator benefits from. :wink:
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Re: The Forex markets ......

Postby Robin Hood » Fri Feb 24, 2017 8:11 pm

Maximus wrote:I have said it before, the major players in the forex market are commercials and governments. Their trade has to go through banks, in other countries and sometimes has to be exchanged to different currencies to get to its destination. The destination is to pay for the goods or services of someone else.

Its basic economics in a technologically advanced world.

Most speculative forex transactions do not even make it to the market in the first place. It depends on the brokers business model.


I don't think that is really true. Forex is simply trading in currencies you are confusing it with commercial trading of goods where the payment goes through a bank(s).

With Forex, it is not related to commercial transactions, as I understand it, the currency remains in the system but the effects are transferred to the trading of goods and services as the speculators are dictating the value of various currencies.
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Re: The Forex markets ......

Postby Maximus » Fri Feb 24, 2017 9:13 pm

So back to the main point and I pressume it is the Tobin tax.

If you buy Japanese Yen and sell your British pounds, then after a few hours you convert them back again and make a profit, you should pay income tax plus another form of tax?
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Re: The Forex markets ......

Postby Maximus » Fri Feb 24, 2017 9:18 pm

Robin Hood wrote:
Maximus wrote:I have said it before, the major players in the forex market are commercials and governments. Their trade has to go through banks, in other countries and sometimes has to be exchanged to different currencies to get to its destination. The destination is to pay for the goods or services of someone else.

Its basic economics in a technologically advanced world.

Most speculative forex transactions do not even make it to the market in the first place. It depends on the brokers business model.


I don't think that is really true. Forex is simply trading in currencies you are confusing it with commercial trading of goods where the payment goes through a bank(s).

With Forex, it is not related to commercial transactions, as I understand it, the currency remains in the system but the effects are transferred to the trading of goods and services as the speculators are dictating the value of various currencies.


The forex market is made up of a series of banks connected to an electronic brokerage service. They quote the prices by matching the buyers and sellers of each currency pair. The forex market is the banks.

If the Bank of England needs to buy some Euro to pay for Euro goods and services, and if there is not enough Euro currency to match it by the European central bank, at a certain price, where do you think the rest of the money comes from? What will happen to the exchange rate?
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Re: The Forex markets ......

Postby Maximus » Fri Feb 24, 2017 9:40 pm

The bank of england is either going to get a "FU, this is the price" or the European central bank is going to get a "FU, this is the price" and someone somewhere, doesnt get paid and gets a "FU, that was the price" because there wasnt enough.

Or,

The price changes and someone loses out and gets a "FU, this is the price."

Or,

"Mr speculator" steps in and says, I have some Euro to make up the rest, take it. <------- This guy should pay Tobin tax?

And

The price stays the same

For

How long?
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Re: The Forex markets ......

Postby Maximus » Fri Feb 24, 2017 10:13 pm

Then Bill Gates comes along and says, "Mr bank of America, I need to buy some Euro to pay my staff in Europe this month. Sort it out please".

So Bank of America goes to CommerzBank and gets a "FU, not at this price". :lol:

Then bank of "America goes back, to "Mr Gates, Sir, I can only get this much at this price"

"Are you crazy, do you know how much that would cost me?" :lol:
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