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Repeal: “Stock Exchanges and Foreign investment”; Voting ends 6th June
Topic Started: Jun 2 2017, 05:00:42 PM (135 Views)
Bai Lung
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Paradise City
The Assembly,

Affirms that when it passes resolutions on economic matters these should be based on sound understanding and theory.

Believes that in view of the potentially devastating consequences of market bubbles it is irresponsible to encourage governments or corporations to borrow beyond their means.

Makes the following observations on trade in securities and currencies.
a) Governments and corporations can raise capital by issuing bonds. In doing so, they undertake to repay the capital, plus interest, in the future. The amount of capital that can be raised in this way is determined by the market's assessment of the risk of default.
b) Corporations can raise capital through the issue of stocks. In doing so they confer part ownership of the company on the purchasers of the stocks and undertake to pay them a part of their future profits. The amount of capital that can be raised in this way depends on the market's assessment of the likely value of these future payments.
c) The interconnection of stock exchanges can sometimes allow a crisis in one nation to damage market confidence, and hence the value of securities, in other nations.
d) A foreign power owning enough of a government's bonds can, by selling them all at once, force down their value and thereby harm that nation's economy by reducing the government's ability to raise capital.
e) Currency trading is fundamentally different. While the purchaser of shares or bonds buys the right to receive payments in the future, the purchaser of currency receives their purchase immediately. Currency trading is therefore not concerned with investment in the same way.

The Assembly therefore

1. Notes that in the light of (a) and (b) GA #401's claim that "foreign investment provides a way for corporations and governments to raise more funds than may have been previously available to them" is false. The amount of capital a government or corporation can safely raise is determined by its economic status. The WA cannot increase this economic status by means of legislation. Attempting to increase the amount of capital that can be raised through securities without regard for the limits imposed by the free market is dangerous to the economy.

2. Takes the view that because of (c) and (d) a government deciding whether or not to permit foreign investment must consider risks as well as potential benefits, making a uniform recommendation to all WA members inappropriate.

3. Is perplexed, in view of (e), by GA #401's inclusion of provisions for currency exchanges since these have no relevance to the investment that GA #401 claims to be about.

4. Regards a new committee regulating all currency exchanges in member nations as inefficient and problematic, since many nations will already have had regulations against bias and rate fixing. It was unjustified to infringe their sovereignty because of a lack of regulation in other nations.

5. Concludes that GA #401 fails to achieve its stated objective, impedes the proper operation of markets and exhibits a lack of economic understanding that reflects poorly on the Assembly.

6. Repeals GA #401 "Stock Exchanges and Foreign Investment".
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"Freedom..."
The Free Republic of Bai Lung
Visit my official NSWiki page on Bai Lung

Quote:
 
"They whine about discrimination. Do you know who is being discriminated against? The Hal'vonnist people of Dannistaan, the ones who created this nation... I am talking about the Dannistrian Hal'vonnist people of the North as well as the East...Communism is racial! A racial minority seized control in Bai Lung and in all her satellite states such as Kelssek, Dovakhan and the Free Pacific States, and many other countries I could name."

-Kelly Minn'ow-Jones, former leader of the Dannistrian National Party
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Bai Lung
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Paradise City
More info here: https://forum.nationstates.net/viewtopic.php?f=9&t=411669&sid=4023da676b49d1521a3570c33b03da6f

This resolution is oow up for vote.

Bai Lung will vote AGAINST.
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"Freedom..."
The Free Republic of Bai Lung
Visit my official NSWiki page on Bai Lung

Quote:
 
"They whine about discrimination. Do you know who is being discriminated against? The Hal'vonnist people of Dannistaan, the ones who created this nation... I am talking about the Dannistrian Hal'vonnist people of the North as well as the East...Communism is racial! A racial minority seized control in Bai Lung and in all her satellite states such as Kelssek, Dovakhan and the Free Pacific States, and many other countries I could name."

-Kelly Minn'ow-Jones, former leader of the Dannistrian National Party
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Bai Lung
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Paradise City
"Repeal "Stock Exchanges and Foreign investment"" was defeated 10,598 votes to 4,843.
Posted Image
"Freedom..."
The Free Republic of Bai Lung
Visit my official NSWiki page on Bai Lung

Quote:
 
"They whine about discrimination. Do you know who is being discriminated against? The Hal'vonnist people of Dannistaan, the ones who created this nation... I am talking about the Dannistrian Hal'vonnist people of the North as well as the East...Communism is racial! A racial minority seized control in Bai Lung and in all her satellite states such as Kelssek, Dovakhan and the Free Pacific States, and many other countries I could name."

-Kelly Minn'ow-Jones, former leader of the Dannistrian National Party
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