Pride and Peril

Stock Market the World’s Richest Place

Stock market is the place where the world’s money goes. The rich foundations, various kinds of funds, banks and commercial institutions put their monies in stock market making it the place where all the funds go and stop. It sounds as if the stock market is a bank. Not exactly so, but though the stock market doesn’t possess any funds physically, all the rich institutions are affiliated to the stock market somewhere.

According to statistics available the amount of money circulating in the stock markets the world over in the latter part of 2008 was $US 36.6 trillion. This figure illustrates the wealth of the investors in the world’s stock markets. New York stock market is the largest in North America while London and Paris are important stock markets in Europe. In Asia two of the big stock markets are Japan’s Tokyo stock market and the Bombay stock exchange in India.

The prices of penny stocks of these exchanges reflect the economic state of the respective country. When the country undergoes difficulties in its economy the stocks loose their value and the stock market shrinks causing more pressure on the economy of the particular country. This happened during recent economic downturn. This started a chain reaction which caused the value of some currencies to depreciate causing more difficulties to the economies. In such situations governments intervene and take corrective action by pumping money into the economy to keep the economy from falling apart.

The modern financial system allows fewer constraints on stock exchanges by way of loosening control and allowing them to have their own control on penny stocks. This allows the stock markets to act on their own. Some of the stock markets allow any entity from any where in the world to do the trading of their stocks. This creates an environment that they could use their resources for the optimum use.