Securities analysis fundamentals and methods

Securities Analysis

Summary of the article

In the article, Marc Pilkington examines the aspect of the dollar-based international monetary system. The fundamental conception of a theory of money ought to be the unit of account. The procedure whereby money is generated in credit-based economies is basic and simple. Every time a bank makes a loan, there is the formation of new bank credit with new deposits, and therefore brand new money is attained. In the contemporary, owing to the advancement in information and communication technology, e-money has come about and significantly grown and developed. This encompasses making payments devoid of the inclusion of bank accounts within the transactions. This is a system that permits an individual to pay both goods and services through the transmission of a number from one computer to the next. These novel communication networks have the likelihood of creating new political groups and positioning in the worldwide scope. As a result, it is sensible to postulate that contemporary transnational communication networks, supporting the technology compelled infrastructures behind the fast-growing stream of e-payments in the international economy, could be a preface to developing a political awareness promising to the advent of a transnational unit of account. The flaws of the current international monetary and financial architecture are pointed out (Pilkington, 2017).

The article further explains flaws in the new international financial architecture and monetary architecture. In delineation, international financial architecture is the structure and group of measures that can help prevent crises and their management in a better and more assimilated international financial setting. The success of the global economy is dependent on international financial architecture. The structural shift toward an internationally assimilated and liberalized financialized capitalism flagged the way for the global crisis. It was flawed because it was centered on a weak theoretical model. This flawed architecture was exacerbated by the intricacy of new financial products above and beyond numerous financial operators (Pilkington, 2017).

On the other hand, international monetary architecture is the group of monetary agreements that permit the cohabitation of currency regions at the regional, national, and supranational regions. There are three perceptible weaknesses. First, there is a massive magnitude of macroeconomic volatility, which depicts the insufficiency of substitute mechanisms for risk mitigation. Secondly, at the core of international imbalances is the export-led model of growth that is linked to inefficacious and socially detrimental policies that were espoused after the Asian crisis (Pilkington, 2017).

Bitcoins and other cryptocurrencies are innovative monetary instruments endeavored to facilitate the shift away from an international monetary system designed around different nation-states and moving in the direction of a true transnational alternative. They signify a movement toward the right direction in the endeavor of departing from a model that is marred by personal gain and competition. In the same manner, blockchain technology is enabling the development of decentralized autonomous organizations, which are bound to alter the firm\'s nature and position within a system of capitalism. However, this aspect of decentralizing capital is significantly hampered by capitalistic platforms that have major monopoly power. Examples of these platforms include major firms such as Apple, Facebook, and Google, that presently continue to dominate the tech sector. The downside is that extensive and robust networks are controlled by one single firm, indicative of centralization, which is in contradiction to the decentralization of capital that is being instigated by blockchain technology (Pilkington, 2017).

On top of demonstrating that the international monetary architecture and the international financial architecture in the world economy are exceedingly flawed, the article tries to decide whether having a transnational unit of account would bring about a sensible and pragmatic alternative to the prevailing global system of payment. This situation is visualized both regarding the field of international relations and with the aid of a reconsidered explanation of the transnational capitalist class. In conclusion, the author asserts that additional research is necessitated to comprehend the effective determining factors of the geopolitical, institutional, technological, economic, and financial aspects that could play a pivotal role in the shifting away from the present-day global monetary and financial system in which there is uneven dominance of the dollar as a unit. This is a move toward a substitute system guiding the transnational forces operating in the world, and aid in the institution of an international global public good to bring about a world with more equity and democracy (Pilkington, 2017).

Discuss cryptocurrency /digital money and its influence on how investing is changing

Ranging from Bitcoin to Peercoin, cryptocurrencies, or digital money has a significant impact on the investment market. In the present day, these digital currencies have gone mainstream. Consequently, the average investor now has the capability of utilizing their dollars, converting them into a specific cryptocurrency desired, and continue trading and making an investment. One of the major influences of investment in digital currencies is that the market is operational for trading 24/7. This is because the market is not regulated by the government (Johnson, 2017). Secondly, akin to the normal trading of stocks, traders can invest in digital currencies in both ways by buying and selling. The massive volatility of cryptocurrencies is also having a substantial effect on the investment market. For example, in a year, between the end of 2017 and the end of 2018, the value of Bitcoin appreciated a high of $19,000 and also depreciated to $5,000 (Protonotarios, 2019). The volatility creates plenty of excitement in trading and investment. This is because the price movements of the digital currencies offer traders with a variety of prospects to either go long or go short (Podobas, 2019).

Personal experiences you have had investing in cryptocurrency if any