Fast money, slow money and no money

In the world’s economy there are only three types of money, fast, slow and no.

Fast money is just that, credit which moves so quickly it requires the use of automated computer algorithms. At its extreme, fast money is circulating the globe, staying in sync with the international dateline, executing “buys and sells” while moving seamlessly through successive economic time zones. Such transactions involve billions in “overnight” cash invested temporarily in currency trades or 24-hour interest-bearing loans. The speed of fast money is such that the temptation to influence trading outcomes is great. The recent scandal of high-speed traders executing fractional trades by manipulating the data transmission differential between America’s seven regional stock market settlement exchanges is one example.

Slow money is the money of “suckers”. Suckers are ordinary folks who settle for annual interest rates of one-half percent or stick money into market rate index funds which rise and fall as regularly as the tides. Slow money is the long-term money of annuities, whole life insurance policies, money-market checking, full-time jobs and consumerism. Slow money forms the economy of the masses. The scandals are more prosaic: unpaid employees, consumer fraud, tax evasion, product dumping, extortion, Ponzi schemes and the like.

The bifurcation of fast and slow has exaggerated the financial advantages given to the wealthy, individuals, corporations and even nations. Fast money is officially regulated as higher risk than slow; any investment bought and sold in under a year’s time does not enjoy the most favorable tax rate. However, when the amount invested overnight is one billion dollars, for example, overnight return on investment of one-hundredth of one percent amounts to one-million dollars. Not bad for a night’s work.

What’s seen at play here is the multiplier effect, a combined impact of computer technology and large amounts of money available to a select and exclusive group, only. Facilitated by the international banking system, a consortium adhering to specific rules of conduct and convention, fast money acts as a nearly invisible wealth enhancer in continuous operation 24-7. The automated buy-sell programming needs little in the way of human intervention; to the contrary, when people get involved system efficiency is compromised. The key to fast money success is keeping it fast, and only computer programming and execution can ensure that.

Ironically, for the slow money crowd effects are the opposite: money loses value. The trillions in slow money accumulated by banks, insurance companies, corporations and nations becomes their fast overnight money, multiplying beyond the observation or awareness of any individual. What’s your’s or mine becomes a meaningless distinction when funds en masse become part of the instrumentality of international finance. Slow money is so slow that it can be skimmed off the top of fast money at any moment’s notice; this is why slow money interest-bearing accounts pay so little: slow money is a tedious bore.

No money means living hand-to-mouth week-to-week, with just enough to survive. No money is the least boring but the most costly type; it forms the world of high-interest pay-day loans, playing the numbers, slot-machine gambling, lotto, pawn shops, money lenders, stick-ups, burglary, petty crime and informs the plot of innumerable cop shows on TV. For those having no money, neither fast nor slow mean very much at all.