Vincent Fernando and Kamelia Angelova write at Business Insider Clusterstock:
Total global currency trading volume has increased by 221% since 2001. Nearly four trillion dollars are now traded every day, on average, which is like trading the value of the entire U.S. economy... every 3.7 days.
What's crazy about the trend below is that if it were to repeat itself over the next decade, then we'd be talking about $12 trillion or more in volume traded each day by 2020. Is this sustainable?
The U.S. has 26% of world GDP. By the year 2015 this is projected to decline to 23.2%. By extrapolation, the U.S. should have between 20% and 21% of world GDP by the year 2020 and would total about $22 billion.
That would mean by 2020 the projected currency trading volume would equal the projected GDP of the U.S. in 1.8 days of trading; and the projected GDP of the world would be equaled in approximately 6.8 days of trading.
It is necessary to have a liquid market for currency exchange, but is it necessary to have currency trading nearly 16 times the total global GDP each year? Following the recent trends, that ratio would increase to nearly 37 times by 2020.
Is it the destiny of the world that the activities of the money changers will end up dwarfing the productivity of the real economy?
Disclosure: No positions.
