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.