A Problem So Massive Even Central Banks Cannot Contain It
By: Graham Summers
GoldSeek.com
Wednesday, 12 October 2016
The financial world has missed the biggest story of 2016.
That story is the fact that the CURRENCY markets have stopped paying attention to Central Bank policy and are now deciding things for themselves.
For those who are unfamiliar with the significance of the currency markets, a brief recap is in order.
The currency markets are the largest, most liquid, and most “alert” markets on the planet.
Globally, the stock market is roughly $69 trillion in size and trades about $191 billion in volume per day.
The bond market (including corporates) is a little over $199 trillion and trades about $700 billion in volume per day,
The currency markets are unmeasured in size as every currency trade is ultimately a pairs trade (meaning to buy one currency you have to sell another). However, we do know that the currency markets trade $5.3 trillion in volume per day.
Put another way, the currency markets trade over 26 times more volume than the global stock market every single day. As such they are the most liquid, sensitive markets in the world.
I want to also stress that at this size, the currency market is much larger than Central Banks. If the currency market begins to revolt against a particular Central Bank, there isn’t a thing said Central Bank can do about it.
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