About financial support to some currency

https://gamesandtehories.blogspot.com/

Kimmo Huosionmaa


There are two ways of giving financial support for some currency, another way is to give official support by using national banks, what would buy that currency, and that would give support for it. But another way is to make the same thing with normal business banks. In this case, the support buying for the targeted currency is made by normal private banks or some international companies, what has enough money for that kind of operations. But there is one problem with this kind of support. If the supporter is the central bank of some nation, there normally would be made the contracts that the supported nations central bank will buy that currency back to home because this would make stabilization for the number of currency, and that would keep the value stable.


Because if there is too much currency in the markets, that would crash the value of the money. And this will be very problematic because if some currency has been dumped, there is very much money of that country in the foreign banks. And if they would release that money would the value of that money crash immediately. The modern economy is the little bit complicated because the national currency is normally out of the golden stock. That means that only a small part of the currency can set by gold, and this is why the stock markets of the gold have no mean for international financial politics.


There is so much empty space in the modern currency, that even the all gold in the world cannot set the value of that money. For the value of modern currency influences many things, like other countries interest to buy that currency.  But also the business life and the private sector have very high influence because the private sector can also buy or sell very much currency. And that problem is that there are no contracts about, what happens to that money, what is left in the business banks, or in some multinational corporation owned bank accounts.


That money had been bought from the free marketing, and it's controlled by private investors. The return of the gold base currency is very difficult for that reason. If some big investor just buys that currency from the markets, it would increase the value of the currency, and this makes the leading of the financial politics very difficult. Because if the money is free to sell or buy, the financial life makes the decision to sell or buy that currency. And that is the very interesting situation because private investors are not connected to governments, and even if buying of some currency would be prohibited, those businessmen can use middle-man, who makes that trading for them.


 If the value of money is weak, would even small-scale buying increase the value, and that calls the currency marketers for making business with that money because that guarantees very big profits for those persons if they buy fast rising currency and then change that money to another currency. There is the question of percents and if the stacks are high, would the profits be high too. But that would shake the value of the currency and cause another kind of problems, like losing the trust of the investors and cause the losses to the industry.

The banking reserve and financial policy

https://gamesandtehories.blogspot.com/

Kimmo Huosionmaa

When governments make their contracts of the structure like roads and buildings they act like other actors. Almost every budget in the building industry is calculated a little bit over the real costs, because of the unexpected catastrophes or disturbing the production. There is calculated the loss of building material, what can be replaced with new elements, and if the accident happens in the building site, would that replacement pay the contractor. 

But if there are no accidents, the money what is reserved for those replacements would leave to the bank accounts. Also, another reserve is made for repairings, but if there is no need for that the money would not be used. This would grow the money in the accounts, what are called the overbudgeting. 

The governments are working like big companies in this area, and one of the things, where that money is used is the financial buffer, what makes possible to make fast investments in the short period. This buffer is so-called "free money", and it is not connected to any special projects or other things. Why I'm writing about governments and corporations like mixing those things? The reason is that money buffers work basically the same way, are they governmental or private sector money. 

There is no difference between an actor in this case. And when we are thinking about the multinational corporations, we are facing the truth, that those corporations have very much money in their buffers. And if they want, they can use it in the thing, called currency investment. In this case, the investor would follow the value of currencies and then sell or change the money for another currency.  

Simply the way to explain, how this thing happens is to buy some currency, and then the value of the currency is rising that actor can sell that money for the better price. But normal way to use this methodology is to use the multiple currencies, what can give short period incoming and winnings for the investor. And if the investor would have billions of dollars in use, even the small change of the value of the currency would give big profits for that person. 

This requires the ability to follow the courses of currencies all the time, but the Internet would give the possibility for that. The change of the currencies value can easily to follow by using the Internet. This way to use currency as the merchandise can also cause the changes in the value of currencies. When somebody would buy money for billions of dollars, that will cause the raise if this targeted currency, and this is the way, where the investor would manipulate the value of the currency. 

If that would be translated into the normal language, that kind of investor cannot make losses, and in this kind of actions can this person use weak currencies. First, this actor would buy the weak currency by using dollars or euros, and this investor would use billions of units of money. And then this targeted currency would get more value. After that, the actor would just buy euros, dollars or yen, and then gets very much profit from that action. This causes, of course, the inflation in the weak currencies, but in this case, the thing would not mean. 

The reason why this kind of currency trader would choose weak currencies is that in this game would the thing, what makes profits is percents. If that investor can pull the currency up many percents, that person would get more profits. And if this tradesman would sell the currency or exchange it in the very short period of the time, would that give very good benefits. In the modern world, the computers can use to build the networks, where the sum would transfer by using many currencies, and that will maximize that profit.