Acquiring financial knowledge is priceless nowadays and, to tell the truth, has always been. We live in times when the usage of fiat is steadily decreasing in the world’s top-GDP countries, and the cash era is meeting its end. Right now, most of the existing money in circulation is already digital, and while the digital age with the decade of e-money 2.0 steps in, one should gain a substantial understanding of how financial gravity works so as to not find themselves on the sidelines of the world of tomorrow.
All dynamic processes and phenomena in the universe occur only in strict submission to the fundamental gravitational law of the underlying dynamics. The world is arranged according to the principle of the dynamic ordering of hierarchical, centripetal systems. Everything dynamic that has a center and periphery will always acquire the principles, laws and order of formation — the hierarchies of similar systems built into one another.
Then again — what’s financial gravity, and what forces impact the market?
From mango field to business empire
The best way to gain an understanding of something complex is to let your imagination help. Imagine a distant tropical island that has no businesses and no investors and nothing at all, but has a constant tourist turnover. Here is a particular room for opportunity. The most sharp-witted ones start opening up a mango-selling business. What’s the very first thing an entrepreneur is looking for? He seeks investments.
From this starting point, when an entrepreneur chooses to launch a business, there is a choice: the most straightforward one is to visit a neighbor and ask for some money. The borrower will evaluate credit risk, the percent of failure — let’s say, 20%. Later, such stakes become the local business benchmark. There is a specific rate at which people are ready to credit when more people come to loan the money later. Read More...