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Investors and speculators would be ineligible and would face the full cost of their mistakes.
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In my article at the beginning of the month, I thought that the hedge funds and large speculators would be forced to buy more 10-Year T-Note futures in order to cover their short positions, which reached a record high in February.
If it were obvious that the banks were deeply undervalued, speculators would be buying them now and driving up their prices.
Yet a world without such speculators would be a poorer one.
The quantity supplied would therefore exceed the quantity demanded, and the difference would have to go into a stockpile that someone (namely, the financial speculators) would be holding in hopes of a higher price in the future.
The initial period is more difficult, because speculators would be selling the currency.
A tax on financial speculation would be invisible to almost anyone except industrial strength speculators.
This persistent intervention, which through July is only 1.4 trillion yen short of the 10.4 trillion yen worth of interventions over the previous three years, has basically scared off the hedge funds and other speculators who would be betting now on a rise in the yen and a fall in the dollar, just as they have bet this year on a rise in the euro.
The speculators and manipulators would be sent running to the hills while the American consumer would for once have something to celebrate.
He had been linked to the trading activities of Ivan F. Boesky, the speculator who would be convicted on insider trading charges.
As a result people's worst fears festered taxes would be substantially increased, benefits would be slashed, people would be forced to become speculators in the Enrons of the world, and Grandma would be tossed into the snow.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com