The futures market in bonds and sterling does not normally open until 8 o'clock in the morning, but, according to yesterday's Guardian (03/05/10: Sterling faces battering within hours of polling) Euronext Liffe, which runs the gilts and futures exchange, has arranged that on Friday, as the election results begin to come it, the market will open at 1a.m
As economist Hugo Radice has pointed out in a letter to the Guardian (27/04/10): "...bond purchasers have an interest in talking down the issue price of UK government debt in the short term... They are happy to exploit our electoral jitters safe in the knowledge that the price will rise as the recovery gathers pace, netting them an easy capital gain."
Many economists have long advocated a Tobin-type tax to curb speculation on the international currency markets. Surely it is time to impose a similar type of tax on all financial transactions to curb short-term speculation. As Keynes pointed out, the purpose of the money markets is to channel savings into useful purposes such as investment: not to provide a casino for gamblers (though I understand that did not stop him making a tidy packet on behalf of his college.)
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