Global capital flows include the economic part of all international commerce. Humans have been trying to predict the future since records began by gazing into the heavens to observe the movement of the stars. Soothsayers, mystics, psychics and even readers of tea leaves have attempted to tell tales of the future making guesses of what is to come. The movements of the planets with observations of comets and flight patterns of birds are modes of future telling. Of course, regardless of the type of soothsaying method used, the keys are fallible, and the mysteries of the future remain mysterious.
In this contemporary society with knowledge of advanced technological means, humans often consider the behavior of ancestors as ridiculous and absurd. Soothsayers and mystics are typically considered superstitious running around guessing about the future and throwing spears at one another.
Capital flow in the age of enlightenment. The 21st-century works are to put aside perceptual prejudices and aims for progress in all areas other than economics which may be biased from its moral philosophy. Instead of observing its functioning, economics in the 21st century descended into prejudice instead of operating to move out of prejudice.
Sadly, prejudice has plagued the capital flow operation of economics for too long, and the majority of economists are not looking at changing this state of morality. Instead of changing what is, the economists reduce the industry into a political movement that is corrupt. Beneficial movement of economists would be from what is to what should be, but this is not where professionals operate.
While behaving in a right action can be challenging, understanding the nature capital flow of the global economy is not as difficult as initially considered. This applies in particular when a person chooses to remove the desire to reach unrealistic social dreams of an economic utopia and observe how to function without trying to interfere. An assumedly chaotic behavior of the economy can be due to the various factors that determine the overall outcome. Even the smallest change in any variable can result in dramatic changes with an overall economic global impact.
Another challenge facing humankind regarding the understanding of economic behavior and the financial market lies in a professional's thought process. In a pure thought state, a human mind will record information in a non-linear fashion. For example, an individual can pay attention to a topic like unemployment with its effect on economic interest rates. The person will then attempt to interpret and pass judgment on the interest rate trend using a handful of key relationships.
This type of thought analysis is incorrect because of inadequate attention being given to additional variables. When completing the accurate financial analysis, the process of collecting information through continuous reduction of the full procedure can take place looking at only a couple of simplistic relationships.
Adam Smith, a well-known economist, discussed in his Wealth of Nations paper that all people will act following their self-interests. This is particularly magnified in today's society when currencies become visible on a global economic scale. A financial percentage swing of approximately 40% over two years would be commonplace. Only a global interest model will filter all financial data within free market movements including both stocks and bonds.
The test of a bull or bear market is one that is rising or falling on a global scale but is not limited to a single domestic currency perspective. What can appear to be in a bull market regarding currency data may look dramatically different when examining international currency. Currency is of high importance when discussing capital flows and is significant when determining the trends of the economy.
The trends in international currency are set in motion using the forces of inflation, taxation, foreign exchange, financial security, geopolitics, labor costs, and politicians. Of course, some aspects can influence capital flows to a secondary level including interest rate differentials. This is nothing new because the capital flow has been operating on a global scale for a long time moving from the West to the East and all the way back to the Stone Age.
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