In layams terms what are the Markets?

[Jumpingjackflash]

On another post I asked the question when or how will inflation end but a lot of people told me they love coffee lol.

I own my own business and sympathise with business owners and employees. I understand wages need to increase due to cost of living but I know business can not keep afford putting wages up. Business need to pay good wages to keep good staff but business margins are disappearing so businesses will go bust and then people will be made unemployed etc etc

Whenever there has been high inflation it leads to a recession. So how does this stop?

What can be done to help with cost of living for employees and help small businesses keep 60% of the workforce employed.

One way would be reduce tax, VAT and fuel duty. Liz Truss Government tried to do this but the Markets did not like this. The Markets caused the economy to crash and Liz Truss government only lasted 49 days.

What I am trying to work out or understand is what are the financial markets and how can they dictate Government policy when the governments bail out these financial institutions out? If the financial markets are fragile enough to fail and need TAX payer bailouts then why is our Government policy weak enough to be dictated by the Markets?

I fully expect to be schooled on this subject. I think politics is short sighted and maybe we need harder long term policies to help the country.

[trickywoo]

You need to understand shorting before markets.

Once you accept people can sell lots of something they don’t own and therefore drive down the price you are halfway there.

[Scootersp]

Massive topic and one which we are all to varying degrees in the dark about.

I mean everyone hangs on Powell's word on every FED meeting but they aren't 100% in control else they could just fix things right? and they'd get their calls right more often than not.

You can read alot and go round in circles too.

I liked these videos, watch the first 3 mins and see if it pricks your interest.

https://www.youtube.com/watch?v=DyV0OfU3-FU&li...

[time waster]

Markets are like a fruit and veg store - you buy and sell things. It just happens instead of varieties of fruit and veg they are financial instruments. Liz Truss government was brought down because the fruit and veg store selling government bonds (things the government sells to raise money) decided they suddenly weren't worth as much as they were and had a sale of them. This effected all the insurance companies and pension funds which owned them. The reduction in price was the largest in history and everyone was worried the government couldn't meet their liabilities and thought a fire sale would start.

[Drl22]

I think you’d have to ask Layam, whoever that is..

[Giantt]

The 'Free' market,is neither free nor fair,large institutions largely control them, BlackRock,JPM etc, government and private investors are like a ship tossed about by the current of the sea.
Markers are manipulated,allowing 'mates rates' to enter positions,and rigging to allow others to exit without loss,Look at the London metal exchange
https://www.google.com/url?sa=t&source=web&amp...

[Doofus]

Jumpingjackflash said:

Whenever there has been high inflation it leads to a recession. So how does this stop?

It doesn't. It's the economic cycle and it keeps turning.

It's used to be a seven year thing, but that timescale is now variable because global economy.