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Chapter 12. Trends and the Yuan > Globalization and the War on Terror

Globalization and the War on Terror

With all the benefits of globalization and living in an interconnected world, there are some significant downsides. One of these is terrorism. Regardless of the U.S.'s “war on terror,” terrorism is here to stay. Antisocial groups have recognized the enormous power of terrorist acts. Although terrorism itself is not a new development in history, terrorists' ability to strike around the world and with enormous destructive power is. Typically, terrorists have been isolated to a disputed region; today, they realize the effectiveness of attacking abroad. For traders, this raises two concerns.

One is the scope of the attacks, because even the destruction of nonfinancial targets can have profound effects on a country's economy, as witnessed in the U.S. and Spain. If an attack occurs, Forex will be the first market to react. The speed, volatility, and unpredictability of this crime make it a major factor in future currency trading.


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