There Is Gravity In The Economy

There Is Gravity In The Economy
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.

Money is what makes the modern economy operate. A country can hold it to inflate the value of its currency, or spread it to deflate the value of its currency. Now, what if an industry can amass a large quantity of money; would it not be able to create an affect on the economy similarly to countries?

The 2008 recession is an example of this because many banks gave bad mortgages and other incorrect financial information to individuals. So, they and others lost a ton of wealth, which caused a deflation in the value of currencies. Similar to how countries can spread their money to devalue their currency. The massive lost of many individuals' wealth caused the values of currencies to drop drastically. Therefore, out of fear, some reacted by withholding their money. Then some years down the line, things started to more or less get better. In addition, the .01% of individuals who own vast amounts of wealth gained more wealth in that time period. They absorbed some of the money that was lost below them to enrich themselves.

How were they able to absorb the wealth? Similarly as the computer giants who absorbed the massive amounts of wealth that was being poured into the market. As well as the website / app giants who absorbed the massive amounts of wealth that was produce for those technologies. Those who can absorb the lost or new wealth in a market are those who have the resources to do so. Moreover, as this absorption occurs without halt, individuals can start amassing enough money to develop an affect on the economy as banks or countries do. Yet, on a varying degree depending on the amount of wealth an individual has. Thus, it seems the most important aspect of the economy-the exchange rate of currencies-is becoming more affected by the few.

When the economy becomes a floating economy it pulls itself to whoever has the largest amount of it, money attracts money. The floating exchange rate could not have been given a better name due to the eerie comprising that can be drawn between the concept of gravity.

Popular in the Community

Close

What's Hot