54. Simple Explanation of The US Economy For Traders Part 2

http://www.informedtrades.com
A lesson on the second two components of the US Economy the Private and Government Sector and how these each affect forex, futures, and stock traders.

In our last lesson we began a discussion on the different components that make up the US Economy and how these relate to trading with a look at the Natural Resources and Labor Force components. In today's lesson we continue this discussion with a look at the Private Sector and Government components and how each of these relates to trading.

While having lots of natural resources and a large well educated labor force to produce goods and services from those natural resources is a great thing, without a way to organize these first two components of the economy, not much would get done. This is where the small, medium, and large businesses which make up the private sector come in. In addition to organizing the labor force to produce goods and services, the private sector is also responsible for raising the capital necessary to bring all these things together which they do through private investors, loans from commercial banks, the bond market, and/or the equities market.

While many people think that the US Economy is dominated by the large corporations, it may come as a surprise the large role that the small business play's in the US Economy. According to the US Department of State:

"Of the nearly 26 million firms in the United States, most are very small—97.5 percent ... have fewer than 20 employees," the U.S. Small Business Administration says. "Yet cumulatively, these firms account for half of our nonfarm real gross domestic product, and they have generated 60 to 80 percent of the net new jobs over the past decade."

While we will go into more details about the private sector and how this all relates to trading in later lessons, it should be obvious at this point the large effect that the private sector has on all markets as they are the ones who: 1. Raise capital through bonds and stocks that we then trade, 2. produce the goods and services which drive demand for the commodities we trade and 3. Affect the foreign Exchange markets by playing a role in what goods and services are produced domestically, which we import from overseas, as well as cross boarder mergers and acquisitions.

Category:

Howto & Style

Tags:

• howto
• trade
• trading
• economy
• fundamental
• analysis
• daytrade
• investing
• business
• forex
• futures
• stockmarket
• informedtrades

[geezer3473]

Sounds good to me! I do have a very effective day-trading spread-betting system that I developed myself and I have found the info in all 50-odd of your videos invaluable. Keep up the good work! Regards, Jamie.

[InformedTrades]

much appreciated and thanks again for the comments. Best, Dave

[geezer3473]

Hi Dave. Loving ALL your videos and website. Are you going to put on any videos of trading ideas/systems that may be of benefit to anyone's trading toolbox?.....

[InformedTrades]

Hi Geezer3473, Thanks for the comment glad you like the videos. Many of the ideas that I have discussed in my videos so far such as chart patterns, indicators, and money management can be combined to form your own trading system. I am going to go into this in more specific detail however the plan right now is to teach all the basics of trading first so people understand what is behind the systems that they are trading before jumping into the market. Best Regards, Dave

[willietrader]

Dave

This is great what you're doing for the new traders.May I ask how long you been a trader

[InformedTrades]

Thanks a lot Willie. I have followed the stock market for a long time but didn't really start trading until I got out of college so about 6 years. Best Regards, Dave

[startupbuildervideos]

Hello, this is Mark from Startup-Builder... Good content, but I found this rather dry... That being said... my videos are sometimes dry as well! It is hard to engage your audience and present your content in an exciting manner. Keep it up... you inspired me to improve. Thanks,

[tomintroy]

I see it the other way around. 2.5% of U.S. corporations own half of the GDP.

[risnandars]

Like all series in this fundamental basics.. my major in technical then after watching this videos it open up my eyes as a trader. keep up the good work

[ExquisiteDoom]

There are no such thing as "government" roles :P I look at them as impediments. Regardless, very good video; my oppinions don't matter. :D

Appreciate these series highly.

[hellomynameisjudge]

People watch this?

[chasleo]

I should add that not every increase in government regulation should be viewed as restrictive to the economy.

The Federal Reserve (although technically independent of the government) for instance needs to update it's guidelines and policies to prevent another flood of sub-prime lending tactics in order to prevent another housing/financial institution collapse situation.

[geezer3473]

Sounds good to me! I do have a very effective day-trading spread-betting system that I developed myself and I have found the info in all 50-odd of your videos invaluable. Keep up the good work! Regards, Jamie.