The Future Of The Financial Markets by Richard Johnson
Here’s one way to look at it.
Traders and market technicians tend to assume that the
financial markets will always be available to them. After
all, trading markets have existed during much of history,
and today’s traders have experienced open-access free
trading markets of many kinds, so there is little or no reason
to believe they wouldn’t exist in the markets of the future.
If the financial and political environments drastically changed
around the world, could financial markets be suspended for
several years, as happened during World War I? Even worse,
could free and open-access trading markets be shut permanently
if the world economy reverted to such previous nonmarket
conditions? While absence of markets have been exceedingly
rare, for much of recorded history, commodity and currency
markets predominated, and financial markets only materialized over the last few centuries. Indeed, the Dutch started them
in the early years of the 17th century. But what conditions or
events could bring about such disturbing circumstances?
Another world war would suffice. Even a relatively quick
and painless victory by the forces of one side or the other
would likely destroy traditional trade routes and access to
manufacturing and material resources. And it could be decades
before worldwide confidence would return to restart
the planetwide economic engine. And would the merging
postwar cultures permit free markets and capitalism? Could
entrepreneurialism disappear, thereby discouraging economic
and technological progress?
Traders should not scoff at these dire possibilities, as many
market and political observers have noticed a profound disquiet.
Events from the Middle East to the Pacific Rim could
get out of hand in an instant. But we don’t require a world
war, much less a regional skirmish to encourage economic
disaster. Prognostications are not necessary; just consider the
conditions of trading today.