Posts Tagged ‘money’
Of fantastic tools to make lots of money
I’ve spent a lot of time in the last few days pondering over what all this talk about inflation in the Indian economy is, what is causing prices to rise the way they are and what what really is the meaning of all the stuff that the government is supposed to be doing to control it (repo rates, reverse rates, CRR and the like).
Clear and concise information has been hard to come by. Until now. This has to be one of the best and simplest financial information documents I have ever read. In just 10 minutes it explained (beautifully) the concepts underlying monetary policy, commodities trading and the futures markets and how they relate to inflation. I was compelled to share the link with you. I found the explanation of how the futures market works to be particularly charming. I once had a conversation with a stock broker, trying to understand how the futures market works. Here is what I learnt:
Me: So how does the Fuutures Market works?
Filthy Rich Gujju Broker: See, we invest money, do trading, and we can make a lot of money.
Me: But how does it work? What happens exactly?
FRGB: See, say you invest 20,000. you can leverage and buy stock worth 1 lakh. Then you either go short or long depending on market. Aur aise apan bahut paisa bana sakte hain. ( And we can make lots of money).
Me: But what is the underlying mechanism behind this?
FRGB: Its just a fantastic tool to make lots of money.
Me: Ah, I see.
P.S.: Do yourself a favor by reading the PDF.
