A few years ago, when I was planning the honors to give to friends and Rabbis at my wedding, I called a friend of mine to ask him to be a witness. He gave a strange reply. He told me that I should ask my Rabbi if he (my friend) can be a witness; my friend hosts a weekly poker game and was afraid it would make him an invalid witness. I called my Rabbi and was told to play it safe and give my friend a different honor. My friend recited the sixth bracha under the chupah instead and my marriage is not suspect.
I have nothing against gambling. I know the dangers, and society, both religiously and secularly, has done a pretty good job explaining them to me. But what I do mind is gambling when I do not intend to. Worst of all, I despise those who prey on the poor, misrepresent gambling and draw the innocent into an addiction against their will. This is why I hate Forex.
Forex dealers to not honestly present risk, causing many to gamble and loose what they do not intend. Forex is dishonestly advertised as being easy to understand, with sites and courses teaching people how easy it is to make money. They tell people to look at interest rates, trends, and other basic financial tools. The truth is that in the real world, these tools are speculative at best; so many political issues play behind the scene that it is nearly impossible to figure out exactly when the currency will change. But even if someone were to use the tools advertised to teach in minutes what economists spend years learning and still fail to fully grasp, the model of Forex sites would still be a gamble. All of the tools for understanding where a currency rate is headed can only help one learn what it will be in the long run. If one were to invest as a day trader, the way most people do on foreign currency sites, then they are only interested in the short run. One may as well ignore all of those intelligent economic tools and just look for political surprises and natural disasters; these are the only two tools that will be able to measure what will happen to a particular currency immediately. But foreign currency sites will never tell their customers that they are taking completely unintelligent shots in the dark and should only think 30 seconds in the future – because that would make their sites look like the simple gambling sites they are.
Forex dealers manipulate their customers in order to turn a profit. Foreign currency sites do not make money if the cutomer gains or looses money; they make money when the customer moves money, irrespective of whether he or she wins or looses. So, in order to make more money, Forex dealers have to get their customers addicted and enable them to trade greater sums. The weapons of choice are up to the minute news and leverage.
The news on a foreign currency site is designed to get the customer nervous and feel that he or she knows the inside scoop, so that he or she will make more trades immediately. Foreign currency trading sites try to balance this by putting forth a warning to their customers not to get addicted. Imagine inviting someone over for drinks, warning him that drinking is addictive, and then enticing him for drink after drink until he is an addict. Clearly there is no good in telling him drinking is addictive if you are not only feeding, but causing his addiction.
Leverage is designed to enable customers to trade much larger sums than they have available and reach levels or risk that would make a roulette player nervous. Sites offer customers the option to “buy” up to 100 times what they have, which can amplify profits tremendously, but offer financial ruin as well (again, sites give a warning in order to cover themselves legally, but they still entice the customer.) Not that the Forex dealers care; their only concern is that the customer converts more money so that they can earn more money on the conversion.
So why do I hate FXCM, specifically? Although they prey alongside an industry of snakes, they themselves offer what some call a best case scenario. Their customer service is considered good, their technology is considered fantastic, and their pricing is better than most. What gets me about FXCM is their marketing of snake oil to the poor. Recently, the heads of FXCM got a seal of approval from Rabbi Shmuel Eliezer Stern, on behalf of Rav Vosner’s Beit Din, approving of their practices, and allowing them to make gambling with foreign currencies permissible in the Haredi world. I cannot imagine any Halachic authority taking the steps necessary for something this dangerous to begin to plague an already destitute community. I can only imagine that the esteemed Rabbi is unaware of the dangers on which he is signing off, and will, upon realizing them, retract his decision. Unfortunately, many in the Haredi community will have to suffer addiction and financial ruin in order for its leaders to take action.
If the lottery is a tax on poor people, then foreign currency trading is an albatross placed around the neck of the innocent to weigh them down and kill them. If you know anyone engaging in such an activity, please plan an intervention and get him or her out of it. If you know any Rabbis that have any influence, please bring this to their attention. The millions of dollars you will save the poor will be one of the greatest forms of tzedakah you ever give.