The data from the foreign exchange market for 2016 showed that the daily exchange turnover reached the amount of 5.067 billion dollars. This substantial sum is a key source of daily financing activities for banks. Due to transaction costs, even when marginal, they ensure bank liquidity in a system that relies on the principle of inter-related investment funds and daily resources.

However, banks didn’t stop at earning a commission through the possibility of converting funds from one currency to another. They went a step further by offering the ability to purchase certain currencies at a higher or lower rate, guaranteeing themselves profit from changes in foreign exchange differences. One of the key advantages that banks have is currency derivatives, where misuse can cause losses affecting the entire society.

A primary field where manipulation with rate differences takes place is in the everyday exchange between euros and dollars. For speculators on exchange rate differences, this currency pair, the most popular on the market, brings earnings expressed in billions of monetary units on a daily basis. Besides that, key irregularities became very visible during the big oil crisis in 2013. The exchange rate of the US currency, used by the world’s leading economies and the largest global consumer of energy, is conditioned by the price of oil and is inversely proportional to its growth and vice versa.

When information comes from the market in the United States, information regarding the observed phenomenon that increases the purchasing power of citizens of this country, the price of oil in the U.S. market grows. However, the level of growth depends on the effect of this trend on the price on the London market. In those circumstances, the dollar exchange rate was lower against the euro. The same relationship applied in cases where, due to the increase in oil prices, mostly because of the blockade of exports or deliveries as a result of the conflict in the Middle East, there was a decrease in the dollar. As the world’s largest consumer, the United States, due to increased production costs, tries to fight for favorable exports.

What has repeatedly happened in recent years is that, precisely at a time when the market was the most active, the daily volume of traffic was the largest. This occurred simultaneously with the growth of oil prices and the dollar exchange rate against the euro. Changes in the exchange rate between the dollar and the euro are among the most unpredictable trends and pose the highest risk for long-term forecasts. However, they are also a permanent source of income for those who assess opportunities, and banks earn a certain amount on every transaction.

Therefore, in addition to market derivatives, the foreign exchange market registered the highest growth in total global trade. Markets, particularly futures, of certain listed goods have already reached the level at which traffic is based on trade agreements that go beyond the actual stock exchange stocks. This is thanks to the fact that futures traders, for example, in oil, aluminum, or cereals, are not looking for the physical delivery of goods over which they have ownership.

The situation with gold from the stock exchange agreements has far exceeded what is physically possible to excavate from mining, showing how many market phenomena are fictitious and to what extent they are confined to papers. However, all this is negligibly small, even negligible, about the money that circulates. If the starting argument takes the information that is primarily about forty international currency market total assets worth less than ten billion dollars, and that today it is almost 530 times more, or 5,300 billion, the only conclusion that we can reach is that the growth is fictitious.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018