It is terrifying to imagine what might happen to USD rate on the spontaneous market. Forex USD rate would be just 1-2% lower in a market that is controllable, more about the author.
I hope that those who oppose the existence a Forex market system control will recall the fundamental economic laws. The spontaneous marketplace is a barometer that determines the real price for goods based upon demand and supplies (in the case of currency exchange, it is the actual rate of exchange).
Episode 2. The flood in USA on September 7, 2005 and hurricane Katrina. The USD rate steadily rises. Chronicle of events.
The dam (dike debacle) caused several US states to be submerged. The transport network, industry, and agriculture were destroyed. Not only panic broke out among the general population, but also among officials of different ranks. Hundreds of thousands died. There were many cases of looting. Looters (and maybe just people desperately hungry and thirsty) were killed by soldiers from the USA army. The USA declared this hurricane a national emergency. A new plan of civic defense was developed for the first time (BBC). The full chronology
“Katrina was bringing America to ruin. Louisiana senators demanded $250 billion from federal budget to deal with “Katrina”, its after-effects.
It is thus an example of the largest natural cataclysms in USA during the last decade. USA got financial support from the least developed country, Haiti (USD 36,000. Ukraine contributed 1 million hrivnias and other financial aid.
What happened to USD rates at the Forex market controllable? USD rate rose in spite of all economic laws, and even contrary to common sense.
Chart 8.7. Chart 8.7.
Chart 8.8. GBP/USD pair movements (View picture at end of article).
Here are some brief conclusions for traders
It is obvious that Forex has moved from being a spontaneous market into a controllable one. Forex traders will need to add modifications to strategy and tactics.