Conspiracy Trader

[fxmade2trade]

they just didnt have enough Greece to make it run

In 2012, Ebrahim Rahbari and Willem Buiter CitiGroup’s Chief Analysts came up with the term “Grexit” a blend of Greece, Euro, and Exit. Following the Financial crisis in Greece it was acknowledged that they might be leaving the Euro, predicting that more money lent would hurt the Euro and neighboring counties and the Grexit would be the only other option than differentiated government bond yields. In 2012, De la Rue a British money printing company was rumored to have been printing out the fresh drachma, which takes an estimated six months from time of order placement to printing on paper. These rumors and fear created a nine-month money withdrawing frenzy. It was estimated that Greek banks deposits fell by thirteen percent constructing a plan to impose control on the movement of money anticipating more panic with upcoming elections.
Convincing the people of Greece to leave the Euro to support a currency that will potentially collapse was not the only challenge. The economic depression that this would cause would end with slow economic growth for many, not to mention the hardship the Greek citizens would face. The Deutsche Bank stated in 2010 that Europe accounted for twenty-five percent of world trade; it was the largest trading partner between China and the United States. Speculation that European stocks would plummet fifty percent and other nation’s bond yields could widen 100 to 200 basis points leaving them unable to service their own sovereign debts.
The Euro has hit a nine-year low, for many counties and regions unemployment along with low inflation and a flat growth rate it seems impossible to reduce the debt levels that would help shift this trend. The Eurozone is better assembled than it was in 2010, The Eurozone can handle the exit without a massive hit because the privet sector only has about five percent of Greece’s debt, and the government is better equipped with bail out funds ready for such events unlike five years ago. However, this has nothing to do with the unpredictability of the people, investors, and stability that will directly affect and hurt the Euro and the ECB.
This has become not only a financial matter, it now is highly political. The upcoming elections on January 25 in Greece have sparked some not so inviting tones from France and Germany. With new prime ministers in Italy and France ready to reform their nations in ways that have gained total support of Germany’s Angela Merkel who has insisted European-imposed austerity on nations who really need the complete opposite. January will be a hard month for the Euro to regain at strength. So much is uncertain and unanswered. Alexis Tsipras may soon be the youngest Greek leader at the tender age of forty with a left-wing alliance Syriza on his side it seems that they deem to diminish the austerity measures, creating disorder among Eurozone members. If elected it is not certain that Greece would exit the Euro but it is implied. Could Greece leaving the Euro cause a ripple effect and open Pandora’s Box to many other counties assuming their role?

 

[fxmade2trade]

ECB Roadside assistance, AAA cant help

Two European Central Bank (ECB) meetings are coming up and traders should take note. The first is a meeting on January 7 on non-monetary policy, the other a very important meeting is on the monetary policy followed by a press release, and a maintenance period that will last until March 10 to guarantee that the appropriate funds are available for those decisions. Statements and leaks have indicated that the ECB is going to use Quantitative Easing (QE) to purchase an abundance of government bonds. Alternatively, they would have the central banks purchase so the country or countries individually would take on the risk of amount borrowed or owed separate from the interest. They could buy bonds that are AAA rated these have little to no risk of default. The AAA rating is issued by credit rating agencies; these bonds have the highest creditworthiness and guarantee liability. Only four companies were left with an AAA rating after the financial crises in 2008. It seems over and over we see failed attempts on monetary expansion and all the monetary measures have been used up. They keep trying to offset deflation by printing and borrowing while weakening currency and eroding the economy.

The ECB declined to comment, however Peter Praet, ECB chief economist had made many indications that these options are what is being considered. The Prospect of more QE has the EUR/USD dropping searching for any support. Wall street is feeling the impact hitting the biggest fall in the last three months. Commodity currencies also felt the panic, and U.S. treasury yields fell, many found a safe haven in the USD and JPY. Between the ECB meetings and the low numbers from Germany and possible withdraw from the Euro by Greece, the Euro has a long road ahead.
chaneyfxtrading.blogspot.com

 

[fxmade2trade]

A Bull caught in a Bear trap
As Obama ends the war in Afghanistan, another war is seen on the horizon, a currency war a fight to prevent a global depression, economic crisis, and financial crashes. Could it be just a coincidence that major market crashes, intermixed with wars and large recessions, depressions come every 7 years. After WW1 the United States dominated finance globally, the roaring twenties brought on unexpected growth economically and industrially, customer demand and new technology created a completely new culture and lifestyle, women for the first time could vote. We saw the influence of music and art change the post-medieval European tradition an existential experience. The change was massive, fueled by a supply side economic policy. The money spent brought back by soldiers acculturated into consumerism. The 1920s was a historical processes and cultural phenomenon a huge change from the post-industrial life they thought that Radio, automobiles, film, sports and electrification enabled for Americans to spend spurring a demand for consumer goods. . As Americans over spent the term "buying on margin" entered our vocabulary and in 1929 stock prices on Wall Street collapsed, putting millions out of work worldwide, The Great Depression or called Black Tuesday. 1932 The great depression at depth, 1939 beginning if WW2, 1946 recession and the end of WW2, 1953 Recession and the end of Korean war, 1060 Recession, 1967 Israeli -Arab war, stocks decline, 1973-1974 Arab oil stock causes a deep recession, 1980-1987 inflation and interest rates create a massive rescission 1994 stock market crash, 2001 bond crash and Mexican peso crash, 2008 do I even need to elaborate? Banks can’t cover the quantity of loans owed in bank credit in fact it is estimated that owed in more than ten times what is actually in bank reserves.
2008 was just a rehearsal for what is to come. A global depression has began, the decline in oil at such a fast rate, steel and cement following the decline with lack of demand and over abundance of supply. Many people are terrified about the market collapse, what they do not realize, the crash has already started. We have already seen this with many different currencies crashing, a result of low demand and fear. Many individuals and companies that are leveraged are bailing on their high yields. One would assume that this is some grand swindle by bankers or the FED perhaps the government it could be a JP Morgan next great idea. If or when this major crash takes place that we would think the powers that be would not let anything come between them and their large piles of fiat, they must have a master plan. This will be the time for the FED to come to the rescue and presume a hero like status forcing our only choice to induce QE4 and bank bail-ins. The reality of raising interest rates would be suicidal for the FED. Look at what the market did in December with just a threat of them raising rates. Fundamentally, the market is prime and ready for a crash. There is not an economic fundamentals to support the strong USD or stock prices, we have used cheap borrowed dollars and they will state, that this will be our recovery. Now that the USD is strong, we will see more and mutable risk assets stretching over nine trillion dollars ready to explode in our face. The energy issue is just the beginning. 1929, 2000 and 2007 were the only other times the S&P 500 higher than its historic average since 1882. Could this manipulation to lower oil, the market and raise the USD to generate a compound interest trap, sending the Eurozone into deflation.

 

[fxmade2trade]

They issued VE ...verbal easing

Since 2008, employment gains have been declining, and just this year they have started to stabilize, effectively pushing the unemployment down with the solid employment gains. Gains in employment were the highest this last November than they have been in the last three years. Online ads for jobs increased, indicating employment gains. Surveys came back stating that many jobs were available and were much easier to obtain. The indicators were encouraging in the anticipation of the reports.

The numbers came back and for the most part, they looked good, then they looked a little closer. For eleven months straight the payroll increases have been up above 200k, those numbers have not been that strong since 1994. The Economy has generated the strongest number in new jobs since 1994, and showed 50k more than the forecasters predicted. The economy looks to be positioned for strong growth in 2015. In fact, the numbers were so good they almost deemed America fully employed by FED standards.

Despite all the optimism in employment, weak wages took the spotlight and the softness in earnings that fell drastically. There really is no obvious fundamental factor that can explain the numbers that were reported. They listed excuses and blamed a “seasonal fluke” in the retail trade sector. This time they couldn’t directly blame the weather. Job quality was not good as well, creating disputes as to what exactly these numbers could mean. Updated adjustments will of course be released further, most likely while some catastrophic event is taking place to distract us, from the outright manipulation of the numbers, as they always do.

These statistics and reports are just a reason to issue or delay the rise of the FEDs interest rates, or a justification of QE printing to monetize debt. These numbers and reports can be perceived many different ways. They have the ability to manipulate what information is presented and how the surveys are handled. The numbers just do not add up.

We have roughly 47 million people who get food stamps and inflation with food prices continue. Many people still live paycheck to paycheck, less than three percent of Americans make over 75k. Jobless claims rose to 299k. Jobs in the energy sector had the highest number of job cuts since 2012. With a population, around 316 million and 94 million are not in the labor pool how can we be close to fully employed. America is still in massive debt and the FED has many people waiting to see if they will raise their interest rates. The verbal easing Yellen keeps spewing has become intolerable. One person will say they are raising rates is what will happen then the other will say no that we will wait. The reality is that if they do raise the rates the trillions in bonds, trade derivatives would create a mass of bank runs and the same banks that control the FED wall St. banks would implode. It would also crush equity markets the many corporations that took massive loans to cover there debt and had to buyback shares. The impact would be devastating for the main players, most of all the FED would become unable to control the economic conditions. The FEDs policy is really designed to take wealth from the largest population and has systematically been wiping out the middle class. They do not really care about the numbers of employment or income they want to keep the current financial system just the way it is. The FED will protect it’s self and the banks, they know that foreign cash will shrink the long-term rates and they can always print to cover their own debts if need be.

 

[fxmade2trade]

EUR/CHF Let's all just get A "Long"
The announcement by the Swiss National Bank (SNB) to reduce its interest rate came as a huge surprise, primarily because the previous reduction just took place within the last thirty days, this decision blind-sided the masses. The SNB dropped its three year long cap against the Euro, causing a staggering thirty percent increase in the Swiss Frank (CHF). This came as a shock to people, and rocked the Forex and equities market, we saw the CHF currency surge. In conjunction with ending the cap and lowered deposit rates they moved the rage of the International Exchange London Interbank Offered Rate (LIBOR) from 0.75 and 0.25 percent to minus 1.25 and minus .25 percent on the three year range offers, administrated by the ICE Benchmark administration (IBA) significantly moving the five base currencys USD, EUR, JPY, GBP and of course the CHF. For me most surprising was the lack of discussion and focus on the LIBOR change, any shift in the LIBOR is a indicator of untrust within banking systems, so it seems odd that they would not be interested in this quite more than the cap. It is a huge indicator of something major about to take place, signs of volatility in the market and banks yearning for USD. The LIBOR evaluates the Central Bank interest rates and sets expectations on the global banking system daily, unlike the Federal Reserve (FED) that issues the rates weekly to raise or lower money supply and growth with federal funds. The LIBOR is on a international scale and releases what rates are, not just what the banks want them to be, this affects the U.S. Treasuries, the TED spread, Fiat, and high yield bonds. In turn, it then trickles down to futures contracts, variiable rate mortgages and USD interest swaps. The move in rage shows the Swiss don't plan to "widen" the balance sheet anymore after the estimated 495 billion-franc record loss for currency interventions they have covered.
The choice of the SNB was to protect the value of the CHF a defence against the growing fear, in regard to the Eurozones economy, uncertainty in Greece and the ongoing crisis in Russia. Fear was the primary reason for this unusual "surprise" foreseeing the upcoming decision next week by the European Central Bank (ECB) and discussion about purchasing government bonds and Quantitive Easing (QE) that would drastically affect the Swiss Economy. The Swiss ending the cap was not a easy decision to make, however, looking ahead to the potentially collapsing Euro with the CHF pegged to it, they deemed no other way. This could be a great move for the Swiss they then can come to the rescue of the EUR buying up assets with CHFs, or the opposite that they know the CHF would appreciate anyway and could not buy up the assets quick enough.
Price stability seems to be a thing of the past. The stoic Swiss Bank hit a record level of appreciation today with the decision to break away from the Euro. The Swiss have pumped billions since 2011 to defend the cap, it was a major surprise. The SNB could have kept purchasing Euro's, only if they could trust France and Germany to pay back the principal and interest on their bonds, with the Euro doomed for QE, the trust came to an end with the estimated 500 billion EUR owed. The Fear that the Swiss would lose more than the 15 percent they lost today made them have to move fast.
The worry now is jobs and wages but most of all the exports sold in foreign markets, watches, metals, chemicals, machinery and agricultural products. So they lower wages and reduce cost of goods. The Swiss are one of the worlds wealthiest countrys, since 2000 the CHF has more than doubled, in 2011 the average adult had an estimated 540,000 in USD, this development had direct correlation with the USD and CHF exchange rate. There are such a high number of wealthy in a small area that the statistics are swayed a little, so the typical individual averages 100,000 USD. Now only three percent of Americans make over 75,000 USD. This is why since 1992 the Swiss have fought for negotiations, "Bilateral" agreements that protect them as well as the security of the SNB and of course the taxation that makes the SNB appeal to so many. The fight was also over free movement of capital, persons, goods and services though the three of the four member states that make up the EU. When the European Economic Area (EEA) membership was denied they came up with a adjusted negotiation package and in 1999 it was approved.These agreements where Switzerland will take on aspects of the EU legislation, and gave them free trade within the EU. Overall, more than a hundred Bilateral agreements between Switzerland and the EU. The Swiss knew that following the framework of the EU would make them members of the European Free Trade Association (EFTA), that alone would gain economic strength of the two, since Switzerland's main trading partner is the EU. The U.S. is the primary an investment partner. The Swiss have always capitalized from their open trade, and communication with the EU. However the Swiss have fought hard to protect themselves and the CHF. So Why did they make this surprising decision today? Why cut themselves from the Euro altogether? They must have had a well calculated reason, perhaps the Euro will undergo some drastic fundamental change, they assumed that it is better to jump ship now. Something is coming and they saw it first, there numbers were great, why go negative?
I would love to know how the ECB and FED took this decision, years of price fixing gone in twenty seconds, they will have to make a sequel to the Doomsday book titled "The Death of Money". The ECB may now want to reconsider QE and print out francs. Unless the ECB knew Germany would never approve QE and this was the only way to debase the Euro without printing. However, I do not think they took into consideration how much it would move the market.
The SNB had to reestablish safety for the elite to park their trillions, if they only had a mass amount of gold to back their currency. I see why they fought the gold referendum so hard. The announcement hit the markets and the appreciation grew quick, we saw investors rushing to the CHF, as a safe refuge from the erratic forex storm. Looking at the charts the CHF it looked like a bomb went off. If you were holding a long position, happy new year to you, for others in short, (literally) I hope you have appropriate stops allocated for the erratic unforeseeable situation this was. This announcement sent fear though many for what is to come next. The SNB has a strong reputation for being reliable and consistent with their actions. The SNBs action was inconsistent with their reputation.

 

[fxmade2trade]

"State of Division" Obama's 2015 pitch
For the most part I do believe that behind closed doors the squad of political show dogs all together are a league of corrupt teammates, stroking each other ego's and pushing for a common purpose and for the most part get along well and give a certain amount of respect when and where it is due . However after the State of Union address last night, big government appears to be more divided than ever. The frustration and hatred was tangible by the newly formulated republican clique, while John Boehner sat behind Obama awkwardly, refusing to applaud or stand as he showed obvious disagreeable facial expressions, holding back eye rolls as the president spoke. The pretentiousness of Obama's ego fueled by the energetic applause of the Democrats was glaring. Biden was Obama's cheerleader, hanging on every word with nods of approval constantly. It was hard to watch as Obama used a tactless approach of fabricating facts and commending himself with admiration then exaggerating the positive aspects of our nation.
It would be wonderful to think all that pizzazz and energy he has flooding back into our nation writing new bills, passing and vetoing laws all to better our nation and people. Sad fact is much of what he said was just plain inaccurate. We have been trying to shut down Guantanamo Bay since 2008, spending millions on each individual there, many anti American terrorists are proven to be recruited you are going to threaten a Veto or executive orders just do it! While we are happy to find jobs for our vet's coming home, and we should be happy we have been successful in that. On the other side, I could bet if we handed them a million dollars each or spent some of the capital it took to get the closing through congress, when he had majority in the Senate and in the House. All that money spent on our vet's and family's our patriotism would skyrocket out of control.
Obama didn't mention looking at our debt problem and finding a long term solution for it. There wasn't real talk of economic growth and equality when he brought up solutions. His points were wonderful and if he was campaigning this would have been a great speech, but to be so egocentric while in your last years, enough to say that he set aside more waters and public lands? Okay so lets focus on the "waters" because up until last year his four predecessors had set aside more acres than Obama. Even George Bush trumped him. Last year Obama expanded the Pacific Remote Islands National Monument from 87,000 to 490,000 square miles. It is all almost water and even though any "saving our land and setting it aside" is a good thing, the location in mid-ocean doesn't have much fishing, drilling or extraction of underwater resources for saving and making such a bold statement that he set aside the most in history. Not to mention that the government can sell them to to privet interests to pay off debt from military or war.
The power trip continued when the "growing" economy was brought up smiling as if he didn't know the facts. Our median household income is only four percent higher than it was December 2011 when we bottomed out and still almost five percent lower than December 2007 when the recession began. The hourly earning rose 1.7 percent in the last twelve months. research states that is still half the rate for achieving a "healthy Economy". New jobs in internet and many mid level jobs grow in general with the population. We are generating jobs, lower paying jobs. There are 1.7million less workers with full time employment than 2007 when the recession began. Since the end of the recession, the employment rate has been steady at around two percent, that is barely a head of inflation. The typical rate for a healthy economy is around four percent so it,s still below where we NEED to be. Seven years later and we have not recovered.
Energy was a big topic and of course we have been working on alternative energy since 1973, fracking was at an all time high until the oil crash, now the Federal Reserve will have to bail out the fracking debt. We can then blame it on the Earthquakes.
The parties that bankroll both sides all know none of these reforms he is proposing will pass. I would love to believe that he truly cares about the individual at the bottom, and all the high fives and his statement that "Crisis has Passed" . The only thing that has passed is the worlds media obsession to believe what you are telling the people to be factual. The reality is we went from six trillion to eighteen trillion in debt, yes the yearly "deficit" has been shrinking , the DEBT seems to never be addressed

 

[fxmade2trade]

Cause and effect is the basis of all currency trading. Currency exchange is supply and demand; fundamental analysis that examines economic factors can help determine supply and demand. You could spend years even decades learning all there is to know about Forex trading. You can apprentice “all knowing traders” dump money into technical systems, apps, and lessons. The best education is experience, if by chance (you will), you do come across the “all knowing trader” run the other way. A good trader is a humble one; they have made bad calls and lost a lot and also made great moves and gained. A humble trader will have more respect for the Forex market, including the individuals that follow their own way and want to learn all they can. The Forex market is a combination of corporate and private traders using different strategies, looking at different pieces of data that sway their moves. With more than eight major currencies and at least seventeen derivatives available for trading at any given time, finding the right information that will work for your strategy is key. More than seven pieces of vital information is released daily, regarding the eight major currencies. This information can be about the country’s inflation, deflation, trade balance, payroll, production, sales, or banks. Specific information can be much more important and move the market causing high, medium, or low volatility. We can download many different types of economic calendars that highlight all of these aspects even what the rate the volatility will be upon the reports release. Timing is also another thing to consider. The time when the information is released in another country can create a trend quickly causing momentum unable to sustain even the right moves. Even if you do your research, the risk of reversal is high due to the volatility.

U.S. economic releases are looked at the most since the USD is involved with 90% of all trades. Unfortunately, the United States focuses on corruption everywhere but America. The correction in the reports will come regardless of what they report now. If you are not one of the sheep believing that the economic data reports are accurate, you can predict what the outcome of those reports will be.The real indicator is price.You can listen to the rumors or buy and sell fact. Focusing on too much on news, propaganda, and fundamentals can damage your performance.The major players are not concerned with the facts or reports based on what they want to happen.

It is important to watch how the market is moving and just what information is making an impact. What factors move the market? I mentioned before Fundamental analysis, the study of economic factors that influence the Forex market. Technical analysis on the other hand predicts patterns, studying price levels, volume, and then forecasting the pair and what direction they will move. Information is the key, and your own knowledge is truly power you have. Unfortunately, the United States focuses on corruption everywhere but America.If you are not one of the sheep believing that the economic data reports are accurate, you can predict what the outcome of those reports will be. If you are one or know one of the major players on Wall Street you may be able to gain your own what they call a “Whisper Number” this number is the earnings per share (EPS) unpublished and unreleased forecast. These numbers are much more regulated and confidential now days. However, major corporations and the extremely wealthy still get tips here and there. You can also generate your very own Whisper Number, just by your own research, information, company financials, and market trends. You can even use instinct or gut feelings when it differs from the consensus forecast you can set your trades appropriately to gain an edge. Forex trading is not based on logic, it is primary a price action strategy, gauging the directional future of the market. You should definitely incorporate all the information given to position yourself correctly.

A study on just how long information from the news affects the market was done by Martin D. D. Evans and Richard K. Lyons in 2004. It showed that it takes hours if not days to absorb the effect on returns and order flow, it generally occurs in the first or second day and really pronounced by the third day lingering till the forth day. This study was also done in 2004. Technological advancements and instant data are much more accessible. You can see the effect happen quickly looking at the volatility. Volatility is crucial to understanding the way the market moves. How much a pair moves by the minute, hourly, daily, and long volatility vary drastically? Monitoring the volatility is constant, and can tell you how you should be trading. Volatility is much more useful when measured by the fundamental and technical analysis. Conditional bias will happen, politics, and other elements will throw off any predictions they have. Developing your own strategy is the key to achieve or sustain profitable trades.

Blogger: Adrienne DeMarco

 

[fxmade2trade]

Check it out

https://www.collective2.com/details/91107357https://www.collective2.com/details/91107357

 

[tomorton]

Interesting paper by Evans & Lyons, thank you.

 

[fxmade2trade]

American Psycho, coming to a government near you!
The last man standing could be the new theme for our global leaders as we witness our alias and enemies destroy each other. Most men would take a beating once or twice verses being a slave for life. Most of the governments globally are slaves, slaves to the banker cartel looking for anyway out from the grips they hold on each country’s destiny. Now we are slaves to technology, and media as a whole by the large corporations, banks intelligence agencies, and such. We would love the idea that our people and economy will be saved, saved by our next leader or government. This is also the premise of fairy tales and they too do not exist. Our world is motivated by money and power, bailouts, loans, all free money they don’t care about the restructure of economy or government. We are brainwashed and persuaded to believe that our vote and what happens in our world still counts when it does not even matter at all. The economic model of our world is broken; our economic and political systems are not working. In the US, our financial system is leveraged out much than in 2008. Yet our “leader” is still convincing us that we are doing better than ever. Our true reality is that most of our world leaders we know and see are just the pawns and do not have any control over the “masters” playing the game. Hope is a strange thing and really that is all you have… nothing else is on the table for us. Our world is being run by an anonymous dictatorship, with obvious dictatorial traits. The people our leaders represent have little or nothing at all; in common, they are not even the one percent. Do you really think that they are fighting for the masses? The UN, NATO, IMF, FED, or the World Bank are fighting for themselves and power, not us and the economy. They are fighting for supreme power, draining every source and growing more powerful.

Power is a complicated thing. In Physics power is defined as the rate of doing work equivalent to the amount of energy consumed per unit of time. Power itself is defined as the ability to act on, with the capability of doing or accomplishing something. The fact is, Power is so attractive that many people can and will be completely influenced by the attractiveness of it. The ability to do, control, command, and sustain it, are all aspects of power. Women are proven much more attracted to powerful men and are generally unaware of the power enticement correlation. Beyond the power attraction lays a deeper oddity. What other kind of people power attracts. In the business world, we have found most powerful jobs will attract a specific kind of individual, they are called psychopaths and sociopaths. Many studies have proven this over and over again. It is scary to think that one out of every two hundred humans is a psychopath. Most psychopaths have no idea they have anything wrong with them at all and will never seek help. Forbes did an article once on the top ten jobs that attract psychopaths, very disturbing but it makes sense. Most were all power positions with out need for empathy. This does not mean that one of every two hundred people will go on a killing spree or have disturbing remains in their freezer. It just means that they lack empathy or emotions with a antisocial behavior, but all have complete disregard for anyone else but themselves. It is a personality disorder that makes it so scary not just a lack of empathy, they tend to have a superficial charm with egocentric behavior, they are highly persuasive and just love and feed off power. Perhaps those jobs can even create psychopaths. The question is how many are in power of us on a global scale? All of them.

 

[fxmade2trade]

Interesting paper by Evans & Lyons, thank you.

Thank you for the feedback

 

[fxmade2trade]

Don't Burst My Bubble...
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.” ~ Ludwig Von Mises

The United States is now based on debt; this perpetual debt has come from the promotion of wealth and financial security. Some may say that consumers and borrowers were coaxed into the borrowing to expand growth in our economy by spending. We saw the outcome of debt and mass loans can do in 2008. In 1999 through 2005, the housing market was up trending and the federal National Mortgage Association (Fannie Mae) wanted to make buying a home more accessible to everyone. In 1977, The Community Reinvestment Act gave strong incentives to lenders who would loan money to low-income borrowers expanding the role of bankers to loan sales men. In 1980, the Monetary Control Act Deregulation made it so lenders could change the interest rate depending on the borrower's credit score, the lower the score the higher the rate, unfortunately a low score is a sign of debt or non-consistent income. In 1982, The Alternative Mortgage Transaction Parity Act gave way to balloon payments making a final payment much higher than original payments and Variable Interest Rates Loans, a loan that fluctuates over time. Then in 1986, The Tax Reform Act that lowered the top tax rate and raised the bottom, it was the first time in income tax history and gave back substantially if you bought a home. All of these Acts were to entice home buyers who could not truly afford a home.

This gave way to a real problem called Sub-prime lending. In 1999, the sub-prime loan mortgage market exploded and anyone with bad credit, no credit, low income, no income could get a loan. Sub-prime loans are primarily used to finance mortgages that Prime loan qualifications cannot meet. This added nine million people to the ranks of home ownership, more than half were minorities. The people were uneducated about the loans and the consequences that could take place. The sub-prime loans offered are expensive and have major penalties and higher interest rates that can make the payments overwhelming as the rate increases. The people knew little about the mechanism of a sub-prime loan, and eagerly singed papers to fulfill their dream of home ownership. The worst mortgages were offered to the least qualified, Adjustable Rate Mortgages (ARMs) like interest only or payment option ARMs would reset after one to two years, then change weekly or monthly. As the increase in borrowers flooded the market, the home equity was rising and the borrower would sell or refinance before the rates would adjust, at least that is what the banks would convince you of while you were signing. They knew what they were doing.

The Federal Reserve lowered the Federal funds rate 11 times, from 6.5% in May 2000 to 1.75% in December 2001. This created a flood of liquidity and growth in the economy and other lending markets. The Securities Exchange Commission (SEC) relaxed the net capital that freed them to leverage up to 30, even 40 times their initial investment in 2004. Goldman Sachs (GS) The Lehman Brothers, Bear Stearns, Merrill Lynch (MER), and Morgan Stanley (MS) all acquired new lenders; including Sub-prime, lenders securing trillions of dollars in mortgage backed securities and saw bigger profits than expected for years. In return the stocks kept rising. The FED began raising its rates up to 5.25 percent.

As people became aware of the downfalls the loans held, the horror stories were airing on every headline creating panic and people stopped buying and started defaulting on their loans. The lenders of the sub-prime loans were filing for bankruptcy weekly, in February of 2007 over twenty-five companies filed for bankruptcy. The news spread like a wildfire. The degree of leverage by the large companies could no longer be supported and they “broke the buck” by creating capital risk with leverage. Many investment firms were unable to cover the credit derivative contracts. They halted the sales of short sells trying to stabilize the market, but it was too late. The panic and uncertainty spread in to the interbank market and they needed to prevent it from becoming a global catastrophe. The government then had to issue bailout programs with help from the European Union and Japan and other central banks came together using conventional and unconventional methods to provide liquidity support to the institutions. The Fed cut rates along with the CB, Sweden, China, Canada, Switzerland, and The European Central Bank. It was not enough. Each with their own versions of bailout packages, outright nationalization government guarantees, and finally The U.S. came out with The National Economic Stabilization Act buying up billions of distressed assets.

We still have seen the effects of the bubble that burst in the mortgage market; the market has not fully recovered and may never. Economic cycles that are manipulated though the monetary expansion, this debt can create a large bubble, much larger than the natural cycle would hold. With that, larger bubble will come much larger consequences; right now, the magnitude of this bubble we are facing in 2015 is bigger than it’s ever been in history. Since 2008, the Central banks (CB) and Federal Reserve (FED) removed collateral from the markets that were high quality. The American people and government are even more leveraged out against even smaller quality assets paying a much higher price than they ever were in 2007. The Wall Street Journal came out with an estimate that states “a third of traders have never or will witness a rate hike” this era has driving a rise in leverage. Chain reaction leading to the collapse has been set in motion for some time now.

The U.S. Treasuries has a rate of return that is considered “risk free” rate of return that is the assets that all assets are priced based on riskiness. The rate has been falling for over twenty-five years. These falling rates then spread to other rates of return making investors barrow or turn to leverage to gain a higher return. While the past thirty years, we have seen investing risk getting cheaper because the bull market those bonds have been in. This time it will be much different the crash will be all assets worldwide and it will happen simultaneously to devastate huge segments of the global population. The Fed can keep printing money until they own all the publicly traded companies and we all end up working for the FED or government. The powers that be like the major investment institutes, CB the FED whose actions have perpetuated and continue to exacerbate the bubble, know just what the outcome of their actions and decisions will be. The European Central Bank, The World bank along with The International Monetary Fund (IMF) all understand and have understood just what this next massive credit bubble and most large corporations wont be hurt by the outcome. They know they have laid the groundwork for it and in some way, they will profit from it in the end. The bubble will only hurt the public and again their personal savings accounts will be drained in the bailout funded by hard working middle class, until they have, nothing left to contribute it will be for the good of the nation, of course.

 

[fxmade2trade]

Out of control
The ever-looming Grexit decision has created weakness and uncertainty in the Euro and the Central Banker's have been planning just what to do next and what limited options they have. The other currencies can benefit from the decision one way or another, one alone would benefit the most the Swiss Franc (CHF). If Greece exits the Euro (EUR) Switzerland would have billions of fresh capital that would need a safe place, that it wont be denominated into Greece's new or old Lira, Peseta or Drachma. One thing is for sure, the Swiss will do whatever it takes to benefit them in the long run. The CEO of Zuercher Cantonal Bank, Martin Scholl has said "anything is possible" when asked the question if they were going to implement capital controls or lower the already negative interest rates. Capital controls limit the flow of foreign capital in a domestic economy. This flow in and out of capital affects Forex, bond, equities and overall market based forces. Control over the flow in and out of an economy can be seen as positive or negative and has been a subject of much debate. The foreign capital includes tariffs, taxes, outright legislation and volume. Many have strong opinions on just how this can affect the economy overall. Economy's open to foreign capital give large companies easier access and the overall demand for domestic stocks can rise a great deal. Some think it can limit the efficiency and economic process, tight capital controls in developing counties are common. The integration of financial markets along with other global factors have contributed to the easing of controls, yet the Swiss are saying this is a option. Central banks all over the world are blowing up with liquidity, what choice does a independent Central Bank have other than limiting their own currency's convertibility? They have an obligation to protect their country's currency from the coming currency crap-storms, and they will do whatever it takes.

The Swiss don't really have any commodities so they import them in U.S. dollars (USD) or in Euros (EUR) so they are striving to lower their currency even though they are in a healthy position with good demand for their currency. Capital controls are control of money and that just leads to control of people, the banks are feeling as though they are losing control over the money and the people. This is a big problem and the SNB will have to make some major decisions before the grexit.

The Swiss have been open with their plans and generally give a great deal when it comes to their next moves and strive in maintaining their independence. They were not so forthcoming when they ended the cap, in fact they made statements that would make people think they never would end it. Because of this many think they have lost their well established credibility. The Central Bank had stated that "The minimum exchange rate must remain" just two days before ending the CHF cap, that caused a black swan event within the market. Huge currency swings like that make trading highly problematic, and fear moves the market the most. People are veering from unstable currencies, however the CHF is a historically "safe" currency. Normally capital controls are implemented to prevent a massive outflow of capital not a inflow, in turn this would seem that the National Bank (SNB) could be worried about a collapse in the CHF or the other way around they thought that a strong currency would hurt exports.

The currency war is accelerating. Central banks, like all decision makers have a range of options. The SNB (one Friday afternoon on a bank holiday weekend) may just impose negative interest rates to a level that forces bank runs then order capital controls to lock everyone out of getting their money, highly doubtful. The discussion of imposing negative rates is a clear sign that the borrowing entity is bankrupt. The SNB has not stated that they will impose the negative interest rates or capital control. However, when you say you're not considering something at the moment, that seems to imply that you might consider it in the future. Most people in the U.S. pay with plastic not cash , in Europe more cash is used. We may soon have to bank at home , it will be the only safe place for your money. The banker cartel's worst fear is that we will take the money printing press away from them and no longer support digital and fiat.

 

[fxmade2trade]

It is all Greek to me...
Just because you read it, see it or feel it, doesn’t mean it is real or you understand it. I have been horrified how the media sways the opinions of people and the market with inaccurate or misleading information. The whole Eurozone and Greek fiasco has been consuming headlines for months and now is postponed until March. I have found most of the information and publicity I have seen and heard is swayed and bias. The information varies from one extreme side to the other; how the Greeks are lazy and spent more than they brought in, they never enforce or paid taxes or they just want to blame the banks, they should suffer, they already were bailed out once. Greece may have been irresponsible, but the banks funded that irresponsibility, knowing Greece was totally bankrupt... The media is making it seem like Greece is snubbing The German taxpayer who is extending a hand just trying to help. The understanding of the language used is what needs to be clear to people reading about all of this as to what exactly the bailout entails.
The Greeks are upset because what they are rejecting is a loan not a bailout, the term “bailout” is misleading on so many levels. A “Bailout” is actually referring to the banks, unless they are bailing out payments to Greek banks. It is not Greece itself or its economy, the money involved in the “bailout” will not help Greece. It will be used to bail out bad banks. Unfortunately, Greece is just a cover for the money transfer. Just to be clear what happened to the “loans” the last time, ninety-two percent went directly to banks, six percent went to government, and only two percent went back to the Greek people. The Greek people are the victims of the banker cartel who is immune to any and all consequences with their actions and funded Greece without effective collateral, knowing the credit risk and dumped funds into it anyway, just socializing the loses to the taxpayers.
The real problem to the Euro group is how any changes they make will affect the global derivatives market. The derivatives market holds roughly seven hundred trillion dollars, ten times the size of the world (GDP) it includes bonds from many different countries, even bankrupt countries, like Greece. The entire western financial system has sovereign bonds from other counties. Sovereign bonds are seen as a “risk free” asset when considering the risk the chances a company will go belly up is way more risk than a whole country going belly up. The banks have to consider what happens to the trades made using Greek sovereign bonds. Many factors have to be looked at by both sides; one thing not mentioned much is the most important thing, collateral. The primary collateral underlying all of these trades is Greece. Sovereign bonds are the senior most assets pledged as collateral for the trillions dollars worth of trades. The bondholders will be affected most by the decisions made. Just how and how much they will be affected is the real question. The last bail out was for the Euro banks that held Greek bonds as collateral. This is not about helping and restricting the Greek economy; it’s all about the Euro group and banks the collateral and maintaining the balance sheet to avoid taking a loss.

To make the situation and language clear, to the people of Europe, the Greeks have spoken at the Tour of Europe to correct misleading information and terminology of just what they are asking for and what the Euro group is offering. Greece and Germany are using non-communication “communication” the resolution is not close. Now Washington has stuck its nose in to the Business between Greece and the Euro group “urging a compromise” this has been by the US Treasury secretary, Jacob Lew. Ironic that the United States can even speak on the debt with America eight-teen trillion dollars in debt.

They want Greece to leave their policies behind and pay back the debt they owe. This of course is not going to happen. Why would Greece pay it back even if it could when every country has debt in one way or another and they are not expected to pay up the hundred percent in debt they owe (US). Greece is just a few years ahead of the rest of the world. The numbers the Euro group is asking for will be impossible for Greece to pay back. Can we even believe the numbers that they are giving us? The numbers are calculated by the same system that was used to get Greece approved into the Euro. We saw those numbers, they were completely fraudulent. How can we blame anyone or take sides? The central banking system has everyone believing that money is free, and now feel entitled to it. There maybe “no risk” in the central banking system, but now there is no value. The bankruptcy and austerity are now inevitable for many counties. This has all been a game, a play executed by best-organized gangs of criminals, our world’s biggest gangsters, the banksters. They are who effectively control the biggest forms of organized crime…the government. All we can do is sit back and watch, while poor Spain and Italy, watching, and thinking, saying, “We’re next”
Germany is doing all of this the worst way they can. They are pushing the decision back to March giving Russia and China time to set up a fund for Greece, which would be a huge game changer. I am sure the Eurozone ego would never see Greece joining Russia as part of its master plan. Spring tends to be Europe’s protesting months, and civilization cannot survive on run theft ethics. The Euro group has most likely already dumped Greek bonds on pension funds long before now. The only reason Greece would repay is to give the Eurozone citizens reassurance that they haven’t just been robbed. Default maybe the only answer; it is immoral to ask future generations to pay debts they did not incur. . The real problem ultimately is the fact, that to a central bank you are the collateral.
This could this just be a step closer to achieving a global currency deemed as the only legal tender by the IMF. They all know eventual inevitabilities with their Madoff-scheme debt-based monetary system. We as individuals will have to change the system. The change will require more than merely recognizing the social facts about central banks; we have to profoundly change paradigms that will be necessary to perceive those central facts in radically different ways. Then you will have a chance of formulating real solutions to the endless cycle of treacherous usury that is the banking system. The global bond bubble is still going to burst; when it does, it will make the last crisis look like a cartoon. Let us not overlook the Euro banks as a whole are leveraged at twenty-six to one.

Just for your own information…The Financial Crisis Inquiry Commission (FCIC) Report states on page. 48
The CFMA effectively shielded OTC derivatives from virtually all regulation or oversight. Subsequently, other laws enabled the expansion of the market. For example, under a 2005 amendment to the bankruptcy laws, derivatives counterparties were given the advantage over other creditors of being able to immediately terminate their contracts and seize collateral at the time of bankruptcy.

 

[fxmade2trade]

That Janet Yellen is Quite a GUY!
Part 1
Last year Ben Bernanke’s predecessor Janet Yellen was sworn in as the Federal Reserve’s (FEDs) chairperson February 2014, she is the first women to lead the FED in its one hindered year history; many people attribute her position to Obama because she was his top pick for the chair. It became clear she would follow in the footsteps of Bernanke after leading her first meeting a little over a month after being sworn in. The decisions the FED make effect every person on a global scale; they truly are the most powerful independent entity in the world. Although the FED is independent, the FEDs governor positions of the FOMC members are appointed by the US President with the approval from the US Senate for fourteen year terms. This fourteen year term is designed to minimize the political influence one president could have over the board. The FED tells us their goal is to have steady economic growth, Yellen has been open about her goals normalizing the US economy.
If the FEDs decision was truly based on data as much as they proclaim they would have increased rates already. If the US showed signs of real economic recovery, Yellen wouldn’t have to tiptoe around her wording the way she is. The FED recently has tried to become “more transparent” with their decisions. Yet, we as the domestic public are only allowed to know very limited information as to what exactly they as a whole are looking at. The FOMC members look at what they call a “Green Book” the forecast of the US economy, a “Blue Book” that holds monetary policy alternatives and the “Beige Book” that is the only book of these three that is released to the public two weeks before the FOMC meeting. This Beige Book holds a description of economic conditions from each Reserve banks district.
The anticipation of the Federal Open Market Committee (FOMC) meeting is just as important when trading Forex as the actual rise or decrease of the interest rate decision. Statements made by any FED member are extremely important. Analysts dissect every word and examine the language used. For many, a hedge on what decisions the FED make is the key to outsmarting the competition and profiting. The media loves any statements made about or by the FED, it is difficult to look at the facts with the government run media polluting the market with meaningless opinions, or what they want you to believe is the direction they are taking. Even the announcements by the FED itself can be misleading, for instance they took two years to stop Quantitative Easing (QE) after saying that they were considering it. Fortunes ride on every word of the Federal Reserves announcements. No other legislative entity has more power and influence on how the financial market moves than the FED. Other counties look to the FED for direction and have even followed the FEDs monetary policies, and continue to do so. This coming meeting is particularly important for many private traders, investors, and big money. This meeting is on the Federal Funds interest rate change, an increase or the decrease of Federal Funds interest rates. The decision will impact every US bank’s interest rate fee and how they lend and barrow money.
For those that don’t know what the FOMC interest rate decision is, let me briefly explain. One could think about the importance of this meeting and announcement like the government quarterly earnings report. Eight times a year the FOMC meets to set the monetary stance, fixing the federal funds overnight borrowing rate. This federal funds “interest rate” is what you hear so much about, the rate the Federal Reserve (FED) lends balances to other depository institutions, banks borrowing reserves and lending to one another at the Federal Funds Rate. The FOMC sets a target rate rage; however, the Open Market actually decides the rate itself. That is why most of the terminology used by the FED is vague or abstract misleading even contradictory. Market forces determine the actual rate itself. The FED will do what it needs to by influencing the operations in swaying the Open Market a multitude of ways. The FOMC makes changes based on non-specific economic data and undisclosed target numbers. Banks, credit unions, all depository institutions are required to keep a target amount of money in reserves at all times. For instance when a bank is over or low on that target reserve they must borrow or lend. A bank above the target is sitting on non-interest gaining money and will be lent to another who is low on their target reserve. The Federal Funds Rate adjusts to the supply and demand of bank reserves .The decrease in rates comes from the reserve supply being greater than the demand causing a decrease in the funds rate. The reports that are looked over by the FOMC from the Central Banks (CB) is ultimately what sets the target rate for now and direction in the future. If a rate decrease is needed, the FED buys US treasury securities creating new money and a larger reserve supply, increasing bank reserves without overnight borrowing in the reserves market. If the reserve supply demand is higher than the supply, they raise rates. The increase means the FOMC would sell US treasury securities causing a reduction of bank reserves and more overnight borrowing. The FED buying and selling open market operations and US Treasury securities is the way they implement monetary policy and maintain the target rate. The problem is liquidity keeps drying up, then open market law fails as money increases then becomes too expensive for government to borrow, this is what Yellen is trying to avoid.

 

[richieforex]

Will the FED be stupid enough to raise rates?

That Janet Yellen is Quite a GUY!
Part 1
Last year Ben Bernanke’s predecessor Janet Yellen was sworn in as the Federal Reserve’s (FEDs) chairperson February 2014, she is the first women to lead the FED in its one hindered year history; many people attribute her position to Obama because she was his top pick for the chair. It became clear she would follow in the footsteps of Bernanke after leading her first meeting a little over a month after being sworn in. The decisions the FED make effect every person on a global scale; they truly are the most powerful independent entity in the world. Although the FED is independent, the FEDs governor positions of the FOMC members are appointed by the US President with the approval from the US Senate for fourteen year terms. This fourteen year term is designed to minimize the political influence one president could have over the board. The FED tells us their goal is to have steady economic growth, Yellen has been open about her goals normalizing the US economy.
If the FEDs decision was truly based on data as much as they proclaim they would have increased rates already. If the US showed signs of real economic recovery, Yellen wouldn’t have to tiptoe around her wording the way she is. The FED recently has tried to become “more transparent” with their decisions. Yet, we as the domestic public are only allowed to know very limited information as to what exactly they as a whole are looking at. The FOMC members look at what they call a “Green Book” the forecast of the US economy, a “Blue Book” that holds monetary policy alternatives and the “Beige Book” that is the only book of these three that is released to the public two weeks before the FOMC meeting. This Beige Book holds a description of economic conditions from each Reserve banks district.
The anticipation of the Federal Open Market Committee (FOMC) meeting is just as important when trading Forex as the actual rise or decrease of the interest rate decision. Statements made by any FED member are extremely important. Analysts dissect every word and examine the language used. For many, a hedge on what decisions the FED make is the key to outsmarting the competition and profiting. The media loves any statements made about or by the FED, it is difficult to look at the facts with the government run media polluting the market with meaningless opinions, or what they want you to believe is the direction they are taking. Even the announcements by the FED itself can be misleading, for instance they took two years to stop Quantitative Easing (QE) after saying that they were considering it. Fortunes ride on every word of the Federal Reserves announcements. No other legislative entity has more power and influence on how the financial market moves than the FED. Other counties look to the FED for direction and have even followed the FEDs monetary policies, and continue to do so. This coming meeting is particularly important for many private traders, investors, and big money. This meeting is on the Federal Funds interest rate change, an increase or the decrease of Federal Funds interest rates. The decision will impact every US bank’s interest rate fee and how they lend and barrow money.
For those that don’t know what the FOMC interest rate decision is, let me briefly explain. One could think about the importance of this meeting and announcement like the government quarterly earnings report. Eight times a year the FOMC meets to set the monetary stance, fixing the federal funds overnight borrowing rate. This federal funds “interest rate” is what you hear so much about, the rate the Federal Reserve (FED) lends balances to other depository institutions, banks borrowing reserves and lending to one another at the Federal Funds Rate. The FOMC sets a target rate rage; however, the Open Market actually decides the rate itself. That is why most of the terminology used by the FED is vague or abstract misleading even contradictory. Market forces determine the actual rate itself. The FED will do what it needs to by influencing the operations in swaying the Open Market a multitude of ways. The FOMC makes changes based on non-specific economic data and undisclosed target numbers. Banks, credit unions, all depository institutions are required to keep a target amount of money in reserves at all times. For instance when a bank is over or low on that target reserve they must borrow or lend. A bank above the target is sitting on non-interest gaining money and will be lent to another who is low on their target reserve. The Federal Funds Rate adjusts to the supply and demand of bank reserves .The decrease in rates comes from the reserve supply being greater than the demand causing a decrease in the funds rate. The reports that are looked over by the FOMC from the Central Banks (CB) is ultimately what sets the target rate for now and direction in the future. If a rate decrease is needed, the FED buys US treasury securities creating new money and a larger reserve supply, increasing bank reserves without overnight borrowing in the reserves market. If the reserve supply demand is higher than the supply, they raise rates. The increase means the FOMC would sell US treasury securities causing a reduction of bank reserves and more overnight borrowing. The FED buying and selling open market operations and US Treasury securities is the way they implement monetary policy and maintain the target rate. The problem is liquidity keeps drying up, then open market law fails as money increases then becomes too expensive for government to borrow, this is what Yellen is trying to avoid.

Hi fxmade2trade

Thank you for this thread, I enjoy reading it, keep up the good work!

Now with what is going on in the markets wouldn't it be foolish of the Fed to increase rates now or in the near future?

China's economy slowing, commodity markets generally extremely bearish, weakness in Asian currencies, dollar strength and a bust in oil.

Those signals for me indicate that the Fed should not or even consider a raise in rates!

Rich

 

[fxmade2trade]

Hi fxmade2trade

Thank you for this thread, I enjoy reading it, keep up the good work!

Now with what is going on in the markets wouldn't it be foolish of the Fed to increase rates now or in the near future?

China's economy slowing, commodity markets generally extremely bearish, weakness in Asian currencies, dollar strength and a bust in oil.

Those signals for me indicate that the Fed should not or even consider a raise in rates!

Rich

Thank you Rich!
I appreciate any feedback, and truly thank you for reading. I also agree.

 

[fxmade2trade]

That Janet Yellen is quite a GUY! Part 2

“Give me control of a nations money and I care not who makes its laws”

~Mayer Amschel Rothschild

The decision made by the Federal Open Market Committee (FOMC) today is fundamental to the direction of the USD and the US economy. The market responds to the FOMC meetings and anticipation of their decision to raise, extend, or lower the Federal Funds interest rate. The FOMC also makes the decision to increase or decrease money supply. We have seen them increasing money supply since 2008 purchasing long term treasury and mortgage backed securities and quantitative easing (QE) and it has caused interest rates to fall to zero percent, the lowest rate possible. The FED spent eighty-five billion a month buying up those securities. In the last few years the have cut back by ten billion a month. The playbook the FED has been using has been misleading trying to fight economic weakness by using a synthetic form like (QE).

If the FED wants economic growth, they decrease rates. Too much of anything is never good; going to any extreme is very bad. An economy that grows too fast leads to inflation. The increase in rates would slow the economies growth, too slow leads to a recession. Any change in the Federal Fund interest rates will impact us all; even the domestic public will feel the effect with the cost of credit. It will impact the direction of the USD, and how the US economy performs overall. Our economy is barley a float and I am being generous in that statement

Seven years since the crash, Yellen may be forced into a hike; the longer it takes for the inevitability of increased rates the harder the recovery will be. The impact would change everything on a global scale. Could the FED even risk a hike? They will have to raise them eventually, and what better time all the numbers are lined up. The USD is in popular demand. Everyone wants USD this leads to an over stimulated demand. Fact is, finding USD counter parties for swaps is difficult, and a raise could help. If they don’t raise people may abandon the USD, even though the FED would never admit that. To raise or not to raise that is the question. Since the FED is independent what is best for them? The FEDs choice really has nothing to do with the economy and stability of monetary polices. This is about the bubble of government debt that cannot be serviced at a higher rate, even if the US had the tax base to do so. The wages report proved we can’t afford to service the debt, if those numbers are even close to the truth. It is a lose-lose situation.

The anticipation has begun. We already see investors who bought high price stocks pulling out before the FOMC meeting. This time around, bonds are no longer a safe haven; the European Union (EU) and the FED have set the market up for a crisis, a historical bond market collapse. The mass (QE) in Japan and Europe has created a runaway dollar making real US economic recovery impossible. The FED is running out of options. Force the domestic public to buy treasury debt and get low yields bankrupting the people. It could be the reverse bankrupting the FED with high rates in interest and mass retracting of domestic cash availability. The economic activity would be crushed by the Treasury’s detraction of five percent off the GDP. Under a mandate, the FED has to pay any profit that acquires from the interest rate increase back to the Treasury so government pays zero in FED held bonds anyway so the raise would not really benefit the FED or impact the government the way one would think. They keep talking about a small rise. Just a one percent rise in interest on debt would total around one hundred and eighty billion dollars added to the FEDs interest. If US Treasury bill becomes too pricy for the government, they will need to be bailed out by the FED and then the FED buys up those expensive bonds. This buying would be a domino effect of disaster, starting with forcing the USD in to the system by QE4, then hyperinflation, the US dollar would be buried. Everything would collapse however all the debt would be gone. This may be the idea, they know much more information than we can even imagine, this could be the “master plan”, the real reset right around the corner.

Will they monetize debt and risk mass inflation? They would **** off every bondholder in the world causing unpredictable consequences. I personally don’t think they will raise rates, not yet and probably not in June. They could go lower, however negative rates are discouraging to investors. They would issue QE4 before they lower them. The risk of negative rates would rip apart the US defecate, the financing costs would be immense. Negative rates would show just how bad it is and I doubt the United States would pay a premium for foreign investors to have cash in the US. If recovery is possible, true economic recovery will never happen with negative rates, and they know that. The increase would cause a political frenzy, voters who have never even thought the raise could effect them will be looking at all the politicians demanding an explanation looking for someone to blame, the derivatives market implodes and it becomes clear that these trusted politicians have been piling the bank derivative liabilities on the United States taxpayer.

The FED has a limited historical perspective on what a healthy functioning financial system really looks like. Have we seen a healthy economy? Do we have a clue what normal bonds look like? An economy where we put money into a CD or account and get paid to save our money. To better our economy as a whole, a normalized economy. The years of manipulation and bailouts have desensitized people into bad decisions with their investments that didn’t even make sense to begin in the first place. Bonds and stocks have been pushed by the zero percent interest rates at unsupportable levels.

The market is overvalued and if the FEDs decision were based on real data as much as they claim, the rates would have increased a while back. We already see investors who bought high price stocks pulling out before the FOMC meeting. Yellen may push the decision back till June in realizing the massive momentum of equities sell offs. The market has already reacted. With little regard for yields, big money ran out and bought up overvalued bonds, praying the FED will extend the decision till June. This time around, bonds are no longer a safe haven. The European Union (EU) and the FED have set the market up for a crisis, a historical bond market collapse. Manipulation of bond rates from trillion dollar swaps has been the course were on, it would be harder to reverse it now. The raise would cause the bond market meltdown and a market crisis. Bonds have been the life support for banks. If they rise rates an even a quarter point, like they are implying. On a one percent yield, big money would dump all bonds paying at one percent and buy up the one and a quarter. It would cause instability with the bond market, and this bubble is getting bigger and bigger. The end of QE caused an international tsunami into US bonds. They may not have a book that can help this time.

Truth and lies move the market the most; sadly, one isn’t different from the other, the truth, or the lie. It doesn’t matter what’s real or not because human behavior is what you trade on or invest in. Behavioral, social, Industrial, all psychologists and analysts, teams of them all put together with specialists in marketing just to predict what you do, say, how you feel, live, dress, but most of all…what you will spend and spend it on. Let’ say for instance you spend on the market, well they know what you are going to purchase, sell or watch and “they” the big money bet on it. Government runs our media and how and what we believe to be real, news, trends, politics and finance. The decision starts today and with the housing numbers so dismal it looks like an extension and more “patience” is in order, how convenient.

It will be a panic driven recovery

 

[fxmade2trade]

This week has proved to be one of the most jaw dropping and thought provoking weeks for myself. Last year I wrote about the direction of the USD on a geopolitical scale, my thoughts on Russia, China, and Iran not what we see or hear on the censored news or some crazy outlandish one sided conspiracy site. I have tried to be neutral and non-bias (hard to do) my opinions are however backed by real facts and my attitude towards society and government, banks and corporations justified.
Let me begin by stating the obvious that I am concerned about…Did no one see the Russian Ruble and Chinese Renminbi as a pair in the currency futures trading! Putin has been on a massive de-dollarization campaign since he left the petro dollar last year. His meetings with heads of countries like China and Iran along with many others including North Korea sparked my interest as he spend a large percent buying up massive amounts of gold from the Shanghai Bank instead of saving the Ruble as oil fell.


America is being marginalized. While the American President has been reforming immigration and healthcare, he has been in complete denial in regards to pissing Putin off and making more enemies than any other president known. Our allies are disappointed and now China and Russia are teaming up and let us not forget whom we are going up ageist. I wrote last year the Putin was putting a team together and now we see this all coming together as conflict in Yemen grows Iran and Syria seem to be looking to Putin as not only a new partner but as a major solution. With all the chaos and team antics that Putin is up to between the US president and the real people running things the US bank Cartel they will not let the USD fall this week for fear that it will show weakness. Even though generally we see the correlation between the USD and oil, I don’t feel this time we will, price manipulation trumps all in times like this.

 

[fxmade2trade]

QUOTE=richieforex;2509676]Hi fxmade2trade

Thank you for this thread, I enjoy reading it, keep up the good work!

Now with what is going on in the markets wouldn't it be foolish of the Fed to increase rates now or in the near future?

China's economy slowing, commodity markets generally extremely bearish, weakness in Asian currencies, dollar strength and a bust in oil.

Those signals for me indicate that the Fed should not or even consider a raise in rates!

Rich[/QUOTE]

I did not see the whole question in regards to China I will be posting my journal today all about Asia and the new geopolitical events taking place I think you'll find it very interesting just a slight different perspective on things