Exchange rates and depression of the worth of the dollar isn’t the only thing that hurts when more money is printed. Its like a ripple in a pool of water when a rock is thrown in. in keeping with the chicken and worth examples, the currency isn’t the only thing that has problems stemming from printing phantom worth money. Investments also are effected, especially the international ones that are used by a lot of banks to make extra income for their account holders or by people who are trading in the international arena. Investing money in a market can be hard to understand on a national stage but in the international one, things really get sticky. I am going to try to break it down for you in a manner that everyone can understand, and yes, there are chickens involved.

Investing in a company via shareholding means that you buy a financial block of the company. This means if the company does well and makes money, the worth of the stock you purchased in the company goes up. If the company does poorly, your stock worth goes down. The rate of fluctuation in going up in value and going down in value is normal. Any investor will tell you that as you invest or buy shares of a company, there must be a loss limit and a gain limit you are willing to accept that would cause you to give up your stock in that company. I have a company that sells toys. My company’s worth per share is 3 chickens. I am a small company, just starting out. There will be fluctuations until I have built up a reputation for being a dependable supplier of toys. My shareholders may experience my share worth fluctuation to 5 chickens or as low as 2 chickens. Once I earn the respect as a worthy, fun, and good toy company, my share worth will go up as high as 9 chickens and possibly as low as 4 chickens. It will still fluctuate, no matter if I am the best toy maker for your chickens’ worth or not. Only so many parents need so many toys, so my company has to be innovative to survive in the toy market. If I do that, my share worth goes up and becomes more valuable. If I don’t, my share worth goes down and my company fails. So Jenny, who bought 100 shares in my company when they were worth 2 chickens. She says, to herself, that before she bought the stock that she would sell it once it hit 10 chickens and abandon it if it went down to 1 chicken. She defined goals for making more chickens for her investment. If she was making 10 chickens per 100 shares, she would be able to sell and make 1,000 chickens when all she invested were 2 chickens each spending only 200 chickens. Investing can be a lot like gambling. You put your money in the ante and hope that you win and do not lose. When searching for investment opportunities, one should educate themselves on the company they are investing in. If the company fails, money will be lost. If the company succeeds, money will be made.

The economy fuels prices of investment shares in a company. When there are employment opportunities and spending increases, the investments in companies will rise. When there are lower employment opportunities and money is tightly budgeted, shares in a company go down. This is when the company looks outside its national investing market and goes international. Dependent upon currency values, the investment in the international markets can be risky business. Since not only does your invested shares have a value, the currency has a value, and the worth of a company in the international market presents itself differently. Let’s say my toy company goes global. I am selling toys in France, Mexico, and Canada. In France, my company shares are worth 1 chicken while in the US they are worth 2 chickens. People buying my shares in France will get them cheap, reflecting their currency value. So some French people have made an investment in my company. All the sudden, the employment rate in America dips and now no one in America can afford my toys. I am selling them cheaply internationally, so I am still making more chickens because I am not dependent on one market. My company does very well and becomes a greatly respected and demanded brand. Now I am making even more chickens and so are my investors according to currency rates that apply. However, suddenly, it is found that my toys cause choking hazards to children. My reputation slips and my company dies a terrible death. You have just lost all your investment as if you stood at the craps table. While people in France lost considerably less than the people in the US, they still lost chickens. It could be that I glut the market with toys and no one is buying them anymore, so I raised the price to contend with running my company. The company dies anyway. Out of chickens is everyone who invested.

Now, considering in France where it cost 1 chicken per share instead of 2 chickens per share in the US, the worth of the US Dollar…er, chicken…is more than the French Dollar…er, chicken. Suddenly, since the US economy is terrible, the Federal Reserve decided to make more chickens than what they had. Now, the US chicken which was worth 1 French chicken is now worth a half of a chicken as the chickens for backing up the worth don’t exist. Now that my country has devalued my stock inadvertently, the foreign countries are not interested in paying that price for toys and my company is doomed to failure. Or, since now my stock has dropped in worth, the French investors might see this as a chicken money maker and buy up huge blocks of stock. It can work either way, but usually there is an abandonment of foreign investors because the net worth of the chicken has seriously tanked and is therefore an unreliable currency. Then things go bad all around and people are suffering job loss, monetary loss, and financial ruination due to the poor decision of one idiot who doesn’t know his chickens for feathers and hopes that eggs are our future. Eggs that don’t exist and chickens that don’t exist to lay them.

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