Information in the Economy <Thought>

08/27/2007

We have often wondered what "value" do traders, investors and deal makers provide to the economy.  Why do they make so much money?

Then we realized that the reason traders, dealers and middle men get so much money out of the economy is they provide the economic system a very valuable resource - information. 

If everyone knows what the true value is and will be the traders can't trade the difference.  Therefore, the less known the information is, the more valuable it is.  The traders provide the conduit of information that makes the whole system work.  That information ends up in the price.

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