Where is the Black Market?

by Investing School on August 5, 2011

Truth to tell, there is no specific location for the black market. It is a slang term which describes illegal economic activity. There are a number of reasons which drive people to participate in the black market: government fees, illegal goods, questionable transactions and so on.

When any good, or sometimes service, is in extremely short supply, a black market may spring up in order to meet the demand. Prices are typically exorbitant. The conditions of buying or selling can be dangerous, and there is often a criminal element involved. Black markets for guns, drugs and other illicit items are common around the world.

Currency is another common item sold on the black market. Sometimes foreign currency is purchased as a hedge against high rates of inflation in a particular locale. Another occasion in which black market currency exchanges flourish is when the local government places excessive controls on exchange rates in contradiction with natural exchange rates driven by world markets.

The Soviet Union was well known for its black markets which traded in just about everything. Food, toilet paper, clothing and foreign goods were bought and sold outside of government control. While fines and punishments were severe in some cases, the government permitted certain levels of activity.

During World War II many Allied countries also sported black markets selling rationed supplies such as clothes, meat, sugar, tires and gasoline.

Investing in black market goods is at best a questionable activity. It can lead to serious fines, jail time and other issues and is best left alone.

Promote or Save This Article

If you like this article, please consider bookmarking or helping us promote it!

Print It | Email This | Del.icio.us | Stumble it! | Reddit |

Related Posts

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: