1) The fact that the money policies created by the United States Federal Reserve may have caused the housing sub-prime boom.
2) The U.S dollar declined in part because of trade deficits with China.
3) The U. S. Government oversight and corporate disclosures created the Sarbanes-Oxley Act.
4) The Treasury and other programs became burdened by budgets such as our country’s war efforts across the globe.
An economic slowdown does not necessarily mean people aren’t finding ways of getting rich. Derivatives are a very lucrative business. The government is urging companies to have more transparency in the derivative markets because most people, even economists, don’t understand how they are traded. When markets become restricted people look for other ways to do business. Rules and regulations have slowed many businesses down from sales, and from expanding on a global level. The 9/11 attacks on the World Trade Center started a new campaign to show that the transparency of money was easily tracked, by implementing the Patriot Act.
Questions one may have about the government:
Why does the government have to know how everything trades? The government needs to understand how stocks, bonds, or currencies are leveraged so that another housing or credit bubble does not happen in the future. They can take this information and apply it to situations as they form so they can pinpoint the cause and create a solution before anything gets too bad.
Does the government want transparency so they can make more money? The government wants to tax us but, their main purpose is to protect consumers and us.
How come the government doesn’t understand derivatives? Now this is a good question! With all of the bright minds in government, they should be capable of finding out how they work In their defense it is hard to pinpoint transactions and hard to pinpoint where a trade originated from.
Trading in futures and options involves a substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.
