Speculative Currency Attacks

Speculative Financial Attacks

Asad Zaman

published in Express Tribune, june 7, 2015

We live in a world awash with money. Not only can the banks create twenty times more money than the amount they receive as deposits, but an enormous shadow banking system has come into existence which creates massive amounts of credit without any regulatory restrictions. At the time of the global financial crisis, the value of financial instruments was more than ten times the world GDP. Daily trade in foreign exchange is around $4 trillion, while actual merchandise trade is only $50 billion. This huge excess clearly represents speculation and gambling, rather than currency exchange for the needs of trade.

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