AGGREGATED VALUE, KEYNES AND CURRENCY TRADING
One of the most popular critiques to Forex Trading, used by Economists from many countries across the world, is based on this question: Is Forex economic wealth?
The economic argument that supports this critique is that Forex trading is a Zero sum game, so there is not aggregated value in this market. Economists quantify the Gross Domestic Product (GDP), as the total sum of the aggregated value of one year in a specific country. For instance if a shoemaker buy leather for 10 Dollars and produce shoes for 50 Dollars, the aggregated value in this case is 40 Dollars.
The absence of aggregated value argument used by Anti-Forex Economists has one problem: Even if Forex Trading is a Zero sum game, it is not the only aspect to be considered in a business evaluation. We will use Keynes theory to reject this Anti-Forex argument.
John Maynard Keynes wrote in 1935 one of the most famous books in the history of Economic Theory: The General Theory of Employment, Interest and Money. In this book Keynes uses this argument "Money is an asset with special functions in the economic system. Specifically, the Financial Markets supply funds from over liquid sectors to those with lack of money for investment. Even if there is a gap between real and financial transactions, Financial Markets are an essential part of any Economic structure in the world"
Keynes presents an important function of Financial Markets, he clearly recognizes the gap between real and financial transactions and the potential absence of aggregated value, but he strongly believed in the necessity of powerful financial markets to transfer money from sectors with surplus to sectors with deficits of money.
Currency Trading markets are a potential opportunity to invest your money and work hard to obtain positive results; obviously there are winners and losers, just like any other business in the world, but Forex as a Financial Market has that favorable characteristic described by Keynes. Unfortunately this argument is not considered by Anti-Forex economists and they present a biased perspective of the problem.
The zero sum argument is not the only one aspect to be considered in a business evaluation. Forex could be Economic Wealth, it depends on you!