And by delusion I mean people being confronted with a problem and not understanding the problem or not understanding how big the problem is. So we have both lying and delusion on a grand scale in Europe. When you have a fiat money system, where money is backed by nothing but confidence, nothing tangible, and you have people running the system either lying or delusional, the chances of a systemic failure become very, very high. By the way, I don’t mean to pick on the European themselves. We in America are delusional as well. It’s just the problems in Europe are a lot more acute and the problems are further advanced there.
According to the latest news reports I have read, the EU is considering implementing EU-wide depositor insurance on their banks, similar to the FDIC whereby depositors have a guarantee of funds even if the banks fail. But Germany has set clear limits on the extent to which they will bail out other countries' banks which made bad bets and lost, which is understandable. Much of the Greek debt has already been written off as a loss. Germany has pockets which are deep but not unlimited.
That's correct Mary but don't expect this to happen any time soon. And when it does happen, expect it to be highly inefficient. The UK as a standalone nation with a standalone currency is unable to guarantee more than £85k in cash deposits to account holders. Can you imagine how this would look when EU wide? If I had to guess, it wouldn't expect more than £25k (yes the number is totally made up).
Midas
Gold hardly has any correlation with the Indian economy ..its more about the social value to it ...its like the flashiest thing you can have (in line with big house, big car, etc - the more the merrier) ...ladies show it off with the most zest (remember majority Indian women in 25+ above age group are housewives, they need something to talk about in their get togethers )
Also it forms an essential component of the big fat Indian wedding ...so despite the economic boom/bust ...the rich are getting richer ...and so will their big fat weddings ....and so will the gold demand (from India) (in the long run)
Also majority Indians aren't financially literate so the easy way out is generation old wisdom of investing in gold and property
There must be several other points ...but that's all i could think of as of now
Originally Posted by EuroTraderApp
Congrats Pips are like a drug!! If you don't mind me asking, would you buy gold on a 3 month view? I worry about the Indian economy and given it accounts for c. 25% of physical demand of the yellow metal, would this somehow cap the upside in the short term? Am no expert so would love to hear your thoughts...
The Yellow line through the axis helps with the distortion problem simply move your chart until it is in the axis again and it is a very good resistance and support level
worse nfp i always go long, today i waited and just went short 1.2437 goes against what i have learnt, but this is exceptional times . still sitting on edge of seat though. guess, thats one reason why i trade. Good luck to everyone.
OK I can top you: I meant to get up just before NFP and adjust my positions quickly depending on the number. My body had other ideas and I slept right through it (don't know why; I made a long drive on Weds and slept in on Thurs and thought I was all better). And I had a fair number of shorts on (from 1.2362; they had been big + when I went to bed!). Oh well, I increased short so that I have a larger number of lots riding down than were riding up, and I do think the entire panic spike will retrace (I don't know why the labor numbers always get these over-reactions, more so than GDP or inflation numbers, but this has happened before).
Originally Posted by EuroTraderApp
Interesting question - that date is 3 days after the Greek election and the two are intertwined. But after today's number, yes I would say there is definitely some kind of QE3 in the making. Twist part 2? I think given the long end of the curve being relatively saturated and yields already very low, I'm not too bullish on Twist. Perhaps Robert has some ideas of what could take place?
Midas
The "Twist" has done about as much as it can do; the interest rates the US Treasury is paying on the national debt are at historic lows and locked in that way for quite some time. Flood the economy with QE? There is the opinion that the Fed never wants to be political:
Originally Posted by Luxuriant
No not during an election year. The FED in no way wants to look like they favor 1 candidate over another. It would also be the last bullet. You save the last bullet till on coming death threatens you. No QE in June.
but then there is also a pervasive opinion that the Fed is ALWAYS political: see from last January this article on Newsmax:
Originally Posted by Jim Rogers
The U.S. government will spend beyond its means and the Federal Reserve will print money to juice up the economy as part of an election-year popularity ploy, says international investor Jim Rogers.
"You have to remember two things — election in America in November, so you are going to see a lot of good news. Of course you have the American government spending staggering amounts of money right now, printing a lot of money and getting ready for the election," Rogers tells The Economic Times, an Indian English-language daily newspaper.
"It happens every four years in America. They do their best to get the economy juiced up so they can win the election."
We have to separate two questions, both important: do players in the market *believe* that the Fed would act politically? It certainly appears so (dollar crashes like this morning's are signs that lots of people keep thinking QE3 is imminent although it keeps not happening). Newsmax is not a very "respectable" site in my view (full of right-wing conspiracy talk) but has a wide following; Rogers, however, is quite respectable (famous for saying in 2002 that the dot-com investment bubble had just been replaced by two new bubbles, in real estate and consumer debt spending; massively shorted all US financials in 2006 and held that position through the end of 2008 for an immense profit). The second question is: does the Fed *actually* behave that way? I Googled around for actual data and found this nice source: Fed is actually more likely to be hawkish (tight on the economy) during election years than ordinary years. If we break it down to specific cases though, the three times the Fed was dovish were when an incumbent was up for re-election (the 1984 "Morning in America" Reagan re-election; 1992 when Bush Sr. failed; 1996 for Clinton) although this is a recent pattern (1972, 1976, 1980 were all races with incumbents, but Fed was tight) and 2004 was an exception (no help for Bush Jr. who squeaked out a re-election anyway).
My impression, based on nothing but what Germans call Fingerspitzgefuehl, is that the Fed could get active in the fall if the summer continues bad, but will wait and see right now. In particular I don't think they want to step on the toes of the ECB: depreciating the USD while Europe tries to depreciate the euro (and maybe Japan acts again on the yen: Bank of Japan stepped in quite sharpish this morning to shove USD/JPY right back where it was) woud all cancel out except for inflation everywhere. So, every bit of bad economic news (especially about the labor market for some reason) will spark this kind of sudden dollar crash on rumors of QE3, but then it all retraces when nothing happens.
In Spain, the request to the IMF for help was a result of discovering that the banking firms books have all been systematically cooked and that the recapitalization needs are much larger than was thought. Bankia, a bunch of failing banks that merged in 2010 to make themselves too big to fail and got nationalized a while ago, reported a 300 million euro profit for 2011; oops, it turns out they missed a zero there, it was really 3 billion, and oops oops oops that was a minus sign instead of a plus sign-- gee, anybody could make that kind of mistake. When the credit-rating downgrades began on Spanish banks there were rumors that Spain would nationalize more, but there is less than zero enthusiasm for that: in fact, Spain wants to unload three smaller regional banks they nationalized earlier, in Catalonia, Valencia, and Galicia; an attempted auction for the Catalonian bank (Catalunya Caixa) earlier this year failed when it attracted no bids whatsoever amid an estimate that its net assets were essentially zero, but they are trying to auction it again and hope to have a deal sometime in mid-June (yes, right around Greek election time; it will be another interesting sign of how badly things are going); two biggest banks in Spain (Santander and BBVA) are bidding against Kutxa (smaller, but with a healthier balance sheet less encumbered by bad real estate paper and maybe better able to come up with some money). Irish referendum on fiscal pact (parameters for bailout fund; not ratified by even big countries like France yet and probably in need of revision, but Ireland was pressed to vote early) is estimated 57% yes, though voters were not very happy about it (Yes was expected to win; a No would have been an excuse for euro selloff).
when the french elections occur, the opening on monday had a gap.
this week monday there was also a gap.
maybe a stupid question, but 1) how can there be a gap, when you can't trade or place trades over the weekend?
with the french elections, i was lucky, and my TP was covered by the gap.
I had mor profits then i would have in normal situation with my TP.
2)Does it also works in the opposite? I mean, in worst case, could you lose more then your balance and make dept by your broker for e.g.. if your trades are to large?
3) if there will be a gap on monday, what do you think? is it long or short.
4) do you guys leave trades open over the weekend, would that be smart?
Money does make you happy, only sad that you can't buy health.
Perhaps a deceptively simple answer to that is there is no-other way out. Not bailing out banks and bond holders is not an option either, because no country at the moment can survive and thrive debt free. Even China is heavily in debt (perhaps we can thank the wonder idea of financial gearing). If all creditors are scared away, where is money going to come from? It's all merry go-around of rounds and rounds of debt from others who borrow from others who borrow from some others. Then we are all very rich, but also very poor at the same time. Everyone is an emperor wearing his new clothes!
Perhaps a deceptively simple answer to that is there is no-other way out
I dont understand all of this, what I do understand quite well is the suffering I see everyday from the 'middle class' if there is such a thing anymore. You are probably right tho.
when the french elections occur, the opening on monday had a gap.
this week monday there was also a gap.
maybe a stupid question, but 1) how can there be a gap, when you can't trade or place trades over the weekend?
There are no stupid questions; we are all ignorant, just about different things; the only thing that is stupid is to choose to remain ignorant about a hole in your knowledge you have become aware of. It is precisely because you can't trade that there is a gap: if, when trading opens, there are no buyers anywhere willing to pay anything nearly as high as what the price was at Friday close (or no sellers anywhere willing to accept as low a price as what it just was), then there is necessarily a gap. This makes a mess for brokers who have a slew of entry-orders for prices within the gap.
Originally Posted by Bart3s
3) if there will be a gap on monday, what do you think? is it long or short.
If, say, the rumor that Greek banks will be stamping all the bills in their vault "GREEK EURO" over the weekend to prepare for when they aren't 1:1 exchangeable anymore turned out to be true (I rate the chance of that exceedingly low) that would cause a huge gap down. I can't think of anything that would make it gap up in this context.
Originally Posted by Bart3s
4) do you guys leave trades open over the weekend, would that be smart?
I usually do. Don't know if that can be considered "smart". If you do leave trades open over the weekend, be sure to check Sunday evening as soon as you can.
I'be been off the forum as I'm in tablet mode due to a trading center rebuild. Should have things running by next week.
What a week to say the least. A lot of down, chop and some real up Today. Time to stand back and let the direction tell the story.
I've been asked what I listen to when I trade and here's a sample: Roseland - The Reaper's Crown - YouTube On Fridays it's a little of everything from James Brown to AC/DC... pump up the beat it is....
My 2 pips: Not much has changed generally in that the slope to 1.200 is not letting up. Until there's an injection somewhere here the trend will continue. I'm not a long a term trader and play the waves as the ocean brings them.
Will We See QE3 (Quantitative Easing) at the June 20th FOMC Meeting?
Yes or No?
We probably need it now, in the face of a slowing world economy, the EUR troubles, and now a slowing US economy. As long as the US economy was treading water, I don't think the fed would dare to do it in an election year. But remember the stink the GOP house put up after QE2 and TWIST? The Fed doesn't want to appear partisan in an election year. I give it a 50/50. I also think that if they wait a little bit, we wont need to, becasue the drop in gas prices will act as a natural stimulus to the domestic economy. That is the only silver lining to a global slowdown. Did you see those China PMI numbers? Wow...
London session review and outlook June 1 - 2012
Review of markets covered in today's edition of Bulls vs. Bears: EUR/USD, GBP/USD, AUD/USD, FTSE100, S&P500, Gold, Brent Crude and WTI.
Regards
Alejandro Zambrano
Currency Strategist | DailyFX Forum (London) azambrano@fxcm.com
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Originally Posted by Mary R 
)
Pips are like a drug!! If you don't mind me asking, would you buy gold on a 3 month view? I worry about the Indian economy and given it accounts for c. 25% of physical demand of the yellow metal, would this somehow cap the upside in the short term? Am no expert so would love to hear your thoughts...
