A better way to explain what happens is,
Player A has 1b deut and Merchants this deut in to Crystal at 3.2.1 rates,
The player A trades the 2 bill Crystal he has for 2 bill deut from player B, at 2.1.1
So now Player A has 2 Bill deut to Merchant in to 4b Crystal, at 3.2.1 rates
Then player A trades 2 bill Crystal to player B and 2 Bill cyrstal to player C and get in return 4 Bill deut returned,
Rinse and repeat, and add in more traders along the way,
Until the Lower trade rate limit 2.1.1 is increased close to the highers 3.2.1 this will never stop,
And due to it making money for GF as people are using the merchant then i doubt it will every change,
The merchant was meant to be for a quick trade not an exploit