On Feb 10, 2009, at 10:20 PM, JC Helary wrote:
> I mean anything that is not related to buying goods or services. So
> I suppose that would include stock exchanges, foreign exchange (am I
> correct to assume that it does not include imports/exports, which
> would fall in the category of "money for goods" ?), credit markets
> etc.
>
> But ultimately, is the proportion itself in direct relation with the
> impact the financial crisis has on the real economy ?
If you're talking all kinds of tradable financial assets, the ratios would be huge. So big that it's hardly worth quantifying.
Not sure, though, how that relates to the impact the financial crisis will have on the real economy. Some of the trading is pointless and has almost no impact on the real. Some is tightly connected. It's very hard to generalize.
What does have a real impact is "deleveraging." I.e., no more new credit-financed spending, and money diverted out of the production/ consumption circuit to pay down old loans.
Doug