At least I was until today when I woke up realising we had been duped for years. In around the 70s a few of the members of my family were falling off the perch, and in consequence I periodically received small legacies. When some of these had accrued in my current account I went along to the bank and sought advice, took it and invested. With time I became more astute with respect to the dealings on the stock exchange, and my investments prospered, until that is, just before I went on holiday. I had been reading the press and interpreted that some of my stocks were in jeopardy. I trooped along to see the young lady who had been advising me at the bank, who had now been head-hunted by a financial adviser. When I had made my point she told me I had no worries, I believed her, went on holiday, but when I returned I realised I had been right. The situation has occurred more than once since then, even only a couple of months ago, just before Northern Rock.
The manipulations of the stock market and mainly the money markets, are a combination of shifting money to where it’s needed, but more importantly for some to accrue money. I suspect that the balance of the transactions is for generating individual wealth, rather than the good of society. I think the problem is that we took the stock exchanges of the world for what they were in the good old days when people had time to consider the options, and had not taken onboard the transformation of the computer and what high-speed communication had done to change the whole system. We were trusting.
Take the case of the young lady whose advice I sought, it wouldn’t matter how much or how little money she had to start with, as I’m sure she was on commission, so if she was as good as at the time I thought she was, she, and consequently all the hundreds of other financial advisers, should all be millionaires within a year or two, and be able to retire, but they were not, they were like the rest of us, wage earners. If you want an operation, you hope the surgeon has been thoroughly trained and is a member of the Royal College. This applies to all the professions, most of which carry insurance against professional error. Today round the world, there are rooms full of young people, probably some with a university degree, but no qualification in financial trading, sitting in front of several computer screens, making gargantuan deals across the globe, but the level of supervision is probably arbitrary, and the effects of those deals on the rest of us, unrecorded.
What I question is whether this current tremendous shake-up in the World’s finances is going to make any difference to the status quo in which financial transactions are conducted. I doubt whether either individually or collectively the politicians of the world will see the error of the ways finance has become global, and the risks that are thus embodied.