The curves for the different currencies, for options, for shares and for an underlying asset, do not always go upward. But some curves are constant and some go down! What is really happening in international economies?
Many hold value assets and underlying assets showing a positive and upgoing trend. But if something negative is happening in the economic markets, the same people wait, and sometimes they sell the value assets! Bitcoin can be the solution in future when coming to currency, but not all curves for them have ever shown an upgoing picture. Therefore, we can be caught into doubt about what is happening, and why we always are doing as we are doing. The winner of life in business, is the person having done the best choices when the markets are good, and selling the value assets when the prices are high. And you should to most sensible things to win the life-game! The life can be different from person to person, and there is a best solution of all things.
But what is really happening in an economy, when the values and the currencies go down? We can have got too high prices, and we then get inflation or hyperinflation. According to the quantity theory for money, we usually get more buying and selling when getting increase in the money supply, and we are holding prices and velocity of money constant. But we have exceptions from that theory, since it just applies in the short term. In the long run, we expect prices and velocity of money to change, and if these things are chaning, everything in the quanity theory for money can be changed in the long term. We can then get too high prices, and too high velocity of money, and these things can be out of the controll to the government and to the national bank in question, and we therefore get inflation! And when we get inflation, the money gets a lower value than otherwise.
We should try to defend the national currency in question. If there is high economic growth, and the firms are productive and effective, the value of the domestic currency will be higher than otherwise. And this implies that all things we can do of making a stronger domestic currency, is to find the relevant variables and factors, and our own currency is depending on the other currencies we are using when making international trade! The domestic currency can also be constant or it can fall in value, and we need to be conscious about what is happening around!
Bitcoin is a currency many economists feel will dominate the national and international currency markets in the future. But this currency has not been without problems, but it has varied in values. If we get too strong inflation in a society and too high prices, we can end up with a wheelbarrow with money to buy gum! That is a situation that no people want, and we should therefore have the prices under control in every country regime with the market philosophy and the state philosophy that are prevalent in all the democratic countries, and also in the communist regimes. You should know what to do, and do what you know, and every way where money is just there could be changes in the future. But it is no good to have too low domestic currency value or too high domestic currency value! As it is with every thing of economic value, too much or too little spoils. And there can be balance or imbalance in the markets and outside the markets.
So, what should be done if the domestic currency value has a value that is not wanted? The government, the parliament, the national bank or the markets should do market operations to get the curves in the right directions. And there could also be changes in the curves with buying and selling in markets. In markets, we have demand and supply, and the prices will follow these movements, and the patterns we find there!
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Sverre Larsen
Kristiansand, Norway
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