Can someone explain to me why free-market currency trading is a good thing? I don't get it. I'm just a normal guy trying to convert a large sum of Currency A into Currency B to make a normal transaction. Why should I be at the mercy of uber-wealthy hedge-fund speculators and micro-traders? The British pound has dropped from 1.22 to 1.14 to the Euro in 3 weeks. This drop can be attributed to two things, one of them real: house prices have dropped in a UK (a bit - not much). The second "factor" is the belief that maybe, possibly, the UK might think about doing some "quantitive easing" (i.e. creating money out of thin air).
However, nothing fundamental has changed between the EU and the UK in the last 6 months - everything's around about the same. In fact, today the UK voted NOT to increase QE. Why hasn't the price miraculously jumped back to 1.22 as it was before all these QE rumours started? Why has the currency been allowed to bop up and down between 1.14 and 1.23 over the last six months? This makes absolutely no sense to me and is one hundred percent down to script-kiddie machine auto-buying and selling faster than you can think and random wealthy organisations and people using the worlds economy as their own private casino.
Surely Mr Posen and Mr Sentance would know what effect their comments would have? Why are the minutes of these BoE minutes made public - I don't care what they discussed, i just want to know what the outcome of the vote was - all this information leads to speculation which means that the currency moves on hot-air - literally.
Governments should fix their currency value against a standard (some rare heavy metal whose street price has been pretty constant because there's not much of it around) for a defined period of time (1 year). When there are so many other ways for people to gamble their money away, why do they need currencies, which deeply affect normal people (like me), as well? What's wrong with this idea?
Rant over.