The Currency War Has Expanded to New Fronts

The Currency War Has Expanded to New Fronts

By Elliott Wave International

Editor’s note: This article was adapted, with permission, from the February issue of The Elliott Wave Financial Forecast, a publication of Elliott Wave International. All data is as of Jan. 30, 2015. Click here to read the complete version of the article, including specific near-term forecasts, for free.

The “Currency War” we discussed in our October issue of The Elliott Wave Financial Forecast and again in the January issue has expanded to new fronts, as world central banks fought to remain economically competitive by trying to push down the value of their currencies.

Singapore became at least the ninth nation to “jump on the easing bandwagon” in January, employing loose monetary measures designed to reduce the value of the Singapore dollar.

Our long term bullish forecast for the U.S. dollar remains on track, and this month the Dollar Index jumped to 95.527, retracing 50% of its decline from 121.020 in July 2011 to 70.700 in March 2008.

Everyone Loves the Buck
Some chart labels have been redacted to preserve value for EWI’s paying subscribers. To get access to the fully labeled chart, click here.

Short term, the rally is stretched like a taut piece of rope: Prices have closed higher for 30 out of the past 39 weeks. Recently, a 10-day average of a poll of currency traders (courtesy trade-futures.com) showed 93.7% dollar bulls, an all-time record high. Also, Large Speculators in futures and options, who are generally trend-followers, now hold an all-time record net-long position of 72,897 contracts, as shown on the above chart.

The extreme in these measures shows the strength of the rally but also reflects a trend that is ripe for a correction.

Click here to continue reading the complete version of the article as part of a lengthy excerpt from the newest issue — including specific market forecasts, fully labeled charts and more — 100% free.


This article was syndicated by Elliott Wave International and was originally published under the headline The Currency War Has Expanded to New Fronts. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

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Europe: The ONE Economic Comparison That Must Not Be Named… Was Just Named

Actually this article was written and produced in September 2014 – I just didn’t publish it on this site – and NOW Deflation is panicking all the finance chiefs of Europe – Predicted years ago and continually – WELL DONE Elliot Wave International for your bold and analytically stance throughout this Deflationary Depression we’ve been in since March 2000.

Very few people called it right – from recollection a handful – well done

Europe: The ONE Economic Comparison That Must Not Be Named… Was Just Named
The Continent is now teetering on the edge of a “Japan-style” deflation. Here’s our take on it.

By Elliott Wave International

It’s happened. The one economic comparison Europe has dreaded more than any other; the name that’s akin to Lord Voldemort for investors has been uttered: “deflation.”

And it’s not just “deflation.” You can still spin that term in a positive light if you get creative enough. Say, for example,

“Falling prices during deflation actually encourage consumers to spend.”

But once you add the following two very distinct words, there’s no way to turn that frown upside down. And those words are“Japan-style” deflation.

Japan has languished in a deflationary cycle pretty much since the late 1990s, its once booming economy reduced to ‘lost decades’ of stagnation. Europe is now teetering on the edge.” (Sept. 19, Associated Press)

Which begs an obvious question: Weren’t Europe’s central banks supposed to prevent this very scenario from happening via their unprecedented, 4-year-long campaign of “money-printing,” bond-buying and interest-rate-slashing?

The answer to that question is… yes. Those actions were indeed supposed to boost inflation.

What’s more, no one can say the European Central Bank didn’t utilize every available tool in their arsenal to try and accomplish that end. The problem is they were fighting a losing battle.

And, we are both happy and sad at the same time to report that from the very beginning, when the first rate cut was loaded into the save-the-economy cannon, we at Elliott Wave International foresaw that Europe’s retreat toward deflation was unavoidable.

Here’s a quick recap of what led us to that conclusion.

— 2011 —

January 2011: The “D” word is way off the mainstream radar. Soaring oil, grain, and commodity prices has fueled widespread fears of runaway inflation. Writes one January 22, 2011 LA Times article:

“Around the world, many countries aren’t confronted with the debilitating forces of deflation, but the opposite — inflation. Annualized inflation in the euro zone rose above the 2% target rate for the first time in more than 2 years.”

February 2011: The European Central Bank unveils its brand-new Long Term Refinancing Operations (LTRO), extending nearly half a trillion euros in 3-year loans to banks at negligible interest rates — to stimulate the economy (and inflation).

July 2011: U.K.’s consumer price index declines, prompting a sigh of relief, not a shudder of fear from the Bank of England, who says “we can now breathe a little easier.”

(VS.)

Our August 2011 European Financial Forecast:

“We maintain our stance, however, that the looming threat is not inflation but deflation. Far from a sense of relief, the Banks’ paramount feelings should soon develop into an unrelenting dread.”

September 2011: U.K.’s consumer price index peaks at 5.2% and officially sets the downtrend in motion.

— 2012 —

January 2012: The Bank of England adds another 50 billion pounds to its asset purchase program, bringing its 3-year campaign of “money-printing” to 325 billion. The European Central Bank is less than 14 years old, yet total assets at the ECB breach 3 trillion.

February/March 2012: U.K. producer price inflation comes in higher than expected, prompting one U.K. economist to say: “PPI: Another wake-up call for apoplithorismosphobes,” the clinical term for those who fear deflation. The economist goes on to recommend that sufferers “seek therapy.” (March 12 Wall Street Journal)

(VS.)

Our July 2012 European Financial Forecast:

“Our models say that inflation rates will keep failing until they’re again measuring the rate of deflation as they last did briefly in 2009.”

August 2012 European Financial Forecast makes the first comparison of Europe to Japan:

“European leaders,” by slashing rates and printing money “seem determined to replicate Japan’s experience. Their efforts will not stop consumer price deflation.”

— 2014 —

May 2014 European Financial Forecast:

“The chart shows that British CPI accelerated lower after falling from a counter-trend peak of 5.2% back in September 2011, with year-over-year price growth just ticks above its late-2009 low.

“More than half of the 28 EU nations either teeter on the brink of deflation or have succumbed to falling prices already.

“The following chart shows that economic stagnation has reached even Germany, Europe’s most robust economy.”

September 2014 European Financial Forecast:

“In a related phenomenon, the press has now jumped on the slew of similarities between Europe’s flagging economy and Japan’s… Clearly, the parallel paths of the two regions have become impossible for the press to ignore.

“The central bank’s latest deflation-fighting contrivance is a €400 billion package of targeted LTRO loans, which are designed to compel banks to lend to ordinary business owners. Also like Japan, the ECB has slashed its main refinancing rate to 0.15% and now charges for banks’ overnight deposits. The result? Shown below, Europe’s largest economy, Germany, just contracted 0.2%; French economic output has ground to a halt; and Italy just entered its third recession since 2008.

The world has finally woken up to the possibility of a Japan-style deflation in Europe — years after the writing was already on the wall.

Now, you need to prepare for what’s to come.

The best part is, Elliott Wave International’s Founder and President, Robert Prechter, as written a book that can help you do just that. And you can read 8 chapters of Prechter’s bestseller, Conquer the Crash, free.


8 Chapters of Robert Prechter’s Conquer the Crash — FREE

This free, 42-page report can help you prepare for your financial future. You’ll get valuable lessons on what to do with your pension plan, what to do if you run a business, how to handle calling in loans and paying off debt and so much more.

Get Your FREE 8-Lesson “Conquer the Crash Collection” Now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Europe: The ONE Economic Comparison That Must Not Be Named… Was Just Named. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

What’s Bigger Than a $1.4 Billion Mortgage Ratings Scandal?

You just cannot find better Independent analysis of the markets – I’ve been an EWI subscriber for years and although I don’t fully subscribe to their Elliott Wave theory I still value their research and analysis of the markets very very highly – The Hovis Trader

What’s Bigger Than a $1.4 Billion Mortgage Ratings Scandal?

The great “inflated” expectations for gold, oil, commodities — and now stocks

By Elliott Wave International

Editor’s Note: You can read the text version of this story below the video.

On January 21, one of the biggest financial lawsuits in recent history came to a costly end. The accused, ratings behemoth Standard & Poor’s, agreed to a $1.4 billion settlement for “inflating credit ratings on toxic assets,” thus accelerating and exacerbating the 2008 subprime mortgage crisis.

Settlement aside, there is a far bigger issue here than business ethics or conflicts of interests, which is not likely to get a hearing in the court of mainstream finance.

Which is: The professionals who are supposed to assess investment risks are no better at it than you or I.

Case in point: Think back to November 30, 2001. The world’s largest seller of natural gas and electricity has gone from cash cow to dry bone. Its share price had plummeted 99%, from $90 to just under $1. YET– the company continued to enjoy an “INVESTMENT GRADE” rating.

The company’s name: Enron. Four days later, it filed for the largest bankruptcy in U.S. history.

Enron seems like a distant memory, but what about the subprime mortgage debacle? Moody’s rating service slashed the ratings of 131 subprime bonds due to higher than expected defaults, in July 2007 two years after the market for non-traditional mortgages had already turned.

Spot a trend here? The “experts” failure to anticipate huge trend changes in companies, and in the overall economy. In the first edition of his business best-seller Conquer the Crash, EWI president Bob Prechter wrote:

The most widely utilized ratings services are almost always woefully late in warning of problems within financial institutions. They often seem to get news about a company around the time everyone else does… In several cases, a company can collapse before the standard ratings services know what hit it.”

So here’s the question: What are the experts not seeing now that you and I need to prepare for?

What about gold? In 2012, with prices nearly reclaiming all-time high territory, the Federal Reserve’s quantitative easing campaign was supposed to keep the wind at gold’s back.

“Ben Bernanke has just offered gold investors a… gilded invitation to participate in the greatest secular bull market of our time.” (April 14, 2012, Motley Fool)

Then this happened:

The same goes for the 2008 peaks in oil and commodities — two more “safe-havens” that were supposed to benefit from the Fed’s money-printing campaign, but instead prices fell to lows not seen since the 2007 financial crisis.

So, that leaves the remaining outlier — equities, which have climbed to record highs. And, according to the experts, the path of least resistance remains up. A December 14, 2014 article in the New York Times:

“We don’t see a lot on the horizon that could derail the U.S stock market in particular.”

Our January 2015 Elliott Wave Theorist urges caution with this single chart of the S&P 500’s year-end valuations since 1927. Every major peak of the last 90 years landed well outside the normal range: 1929, 1987, 2000, and 2007.

We believe the precarious placement of 2014 sends a similar message: “The stock market and the economy are not in a new multi-decade recovery as economists believe, but very late in a transition phase from boom to bust.”


Deflation Rearing its Ugly Head report

Free online report from Elliott Wave International:
Deflation Rearing its Ugly Head in Subtle and Not-So-Subtle Ways Around the Globe.

You still have a small window of time to prepare for a scenario most investors don’t even know is possible — and now even more likely.

Get your free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline What’s Bigger Than a $1.4 Billion Mortgage Ratings Scandal?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Heard about DEflation?

Heres further detail of the Deflation time bomb over hanging us at this time

Debt and Deflation: Three Financial Forecasts

There’s more to deflation than falling prices

By Elliott Wave International

Editor’s note: You’ll find the text version of the story below the video.

Inflation ruled from 1933 to 2008.

Yet in the just-published Elliott Wave Theorist, Bob Prechter’s headline says, “Deflation is Starting to Win.”

Take a look at this chart from The Telegraph:

… the number of countries experiencing ‘lowflation’ has been steadily rising from 2011 (blue line). The eurozone tipped into outright deflation in December, with Germany, Britain and the US also seeing prices rise at near record lows.

The Telegraph, January 14

But as Prechter explains, falling prices are an effect of deflation.

Deflation is not a period of generally falling prices; it is a period of contraction in the total amount of money plus credit. Falling prices in an environment of stable money is indeed a good thing. In fact, in a real-money system, it is the norm, because technology makes things cheaper to produce. But when debt expands faster than production, it becomes overblown, then wiped out, and prices rise and fall in response.

The Elliott Wave Theorist, January 2015

So a major debt buildup is a precondition of deflation. Do we see this today? The third edition of Conquer the Crash shows the answer.

Total dollar-denominated debt has skyrocketed since 1990. The upward trend turned slightly down during the 2007-2009 financial crisis, but has since crept higher.

How fast and how far can this nearly $60 trillion in debt dwindle?

It’s instructive to review the collapse of the 1920s credit bubble.

On the left side of the chart, note how debt deflation needed nearly a decade to unwind.

Today’s mountain of debt is far higher than in 1929, yet our indicators suggest that the next debt deflation could unfold much more rapidly.

The third edition of Conquer the Crash provides 157 forecasts. Here are three:

  • Real estate values will begin to fall again, ultimately more than they did in the 1930s.
  • Hedge funds, mutual funds, money-market funds, managed accounts and brokerage accounts will go out of favor — many will go out of existence.
  • Financial corporations previously bailed out by the Fed and the U.S. government will fail again, as will new ones.

Deflation Rearing its Ugly Head report

Free online report from Elliott Wave International:
Deflation Rearing its Ugly Head in Subtle and Not-So-Subtle Ways Around the Globe.

You still have a small window of time to prepare for a scenario most investors don’t even know is possible — and now even more likely.

Get your free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Debt and Deflation: Three Financial Forecasts. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

You were Warned well inadvance

I posted this in February 2014, I’d read it again and then look at what’s been happening since September:

https://thehovistrader.wordpress.com/2014/02/20/now-is-the-time-to-beware/

REPOST: Shocking Facts About The Deindustrialization Of America That Everyone Should Know

Once again many many thanks to our friends at: http://theeconomiccollapseblog.com/ for producing and making this article available.

Major economic problems take decades to build up – the proof is there for all to see.

This has also happened here in the UK, but not on the same size as America.

 

Shocking Facts About The Deindustrialization Of America That Everyone Should Know

Posted: 03 Apr 2014 12:58 PM PDT

Abandoned Packard Automobile Factory - Photo by Albert DuceHow long can America continue to burn up wealth?  How long can this nation continue to consume far more wealth than it produces?  The trade deficit is one of the biggest reasons for the steady decline of the U.S. economy, but many Americans don’t even understand what it is.  Basically, we are buying far more stuff from the rest of the world than they are buying from us.  That means that far more money is constantly leaving the country than is coming into the country.  In order to keep the game going, we have to go to the people that we bought all of that stuff from and ask them to lend our money back to us.  Or lately, we just have the Federal Reserve create new money out of thin air.  This is called “quantitative easing”.  Our current debt-fueled lifestyle is dependent on this cycle continuing.  In order to live like we do, we must consume far more wealth than we produce.  If someday we are forced to only live on the wealth that we create, it will require a massive adjustment in our standard of living.  We have become great at consuming wealth but not so great at creating it.  But as a result of running gigantic trade deficits year after year, we have lost tens of thousands of businesses, millions upon millions of jobs, and America is being deindustrialized at a staggering pace.

Most Americans won’t even notice, but the latest monthly trade deficit increased to 42.3 billion dollars

The U.S. trade deficit climbed to the highest level in five months in February as demand for American exports fell while imports increased slightly.

The deficit increased to $42.3 billion, which was 7.7% above the January imbalance of $39.3 billion, the Commerce Department reported Thursday.

When the trade deficit increases, it means that even more wealth, even more jobs and even more businesses have left the United States.

In essence, we have gotten poorer as a nation.

Have you ever wondered how China has gotten so wealthy?

Just a few decades ago, they were basically a joke economically.

So how in the world did they get so powerful?

Well, one of the primary ways that they did it was by selling us far more stuff than we sold to them.  If we had refused to do business with communist China, they never would have become what they have become today.  It was our decisions that allowed China to become an economic powerhouse.

Last year, we sold 122 billion dollars of stuff to China.

That sounds like a lot until you learn that China sold 440 billion dollars of stuff to us.

We fill up our shopping carts with lots of cheap plastic trinkets that are “made in China”, and they pile up gigantic mountains of our money which we beg them to lend back to us so that we can pay our bills.

Who is winning that game and who is losing that game?

Below, I have posted our yearly trade deficits with China since 1990.  Let’s see if you can spot the trend…

1990: 10 billion dollars

1991: 12 billion dollars

1992: 18 billion dollars

1993: 22 billion dollars

1994: 29 billion dollars

1995: 33 billion dollars

1996: 39 billion dollars

1997: 49 billion dollars

1998: 56 billion dollars

1999: 68 billion dollars

2000: 83 billion dollars

2001: 83 billion dollars

2002: 103 billion dollars

2003: 124 billion dollars

2004: 162 billion dollars

2005: 202 billion dollars

2006: 234 billion dollars

2007: 258 billion dollars

2008: 268 billion dollars

2009: 226 billion dollars

2010: 273 billion dollars

2011: 295 billion dollars

2012: 315 billion dollars

2013: 318 billion dollars

Yikes!

It has been estimated that the U.S. economy loses approximately 9,000 jobs for every 1 billion dollars of goods that are imported from overseas, and according to the Economic Policy Institute, America is losing about half a million jobs to China every single year.

Considering the high level of unemployment that we now have in this country, can we really afford to be doing that?

Overall, the United States has accumulated a total trade deficit with the rest of the world of more than 8 trillion dollars since 1975.

As a result, we have lost tens of thousands of businesses, millions of jobs and our economic infrastructure has been absolutely gutted.

Just look at what has happened to manufacturing jobs in America.  Back in the 1980s, more than 20 percent of the jobs in the United States were manufacturing jobs.  Today, only about 9 percent of the jobs in the United States are manufacturing jobs.

And we have fewer Americans working in manufacturing today than we did in 1950 even though our population has more than doubled since then…

Manufacturing Employment

Many people find this statistic hard to believe, but the United States has lost a total of more than 56,000 manufacturing facilities since 2001.

Millions of good paying jobs have been lost.

As a result, the middle class is shriveling up, and at this point 9 out of the top 10 occupations in America pay less than $35,000 a year.

For a long time, U.S. consumers attempted to keep up their middle class lifestyles by going into constantly increasing amounts of debt, but now it is becoming increasingly apparent that middle class consumers are tapped out.

In response, major retailers are closing thousands of stores in poor and middle class neighborhoods all over the country.  You can see some amazing photos of America’s abandoned shopping malls right here.

If we could start reducing the size of our trade deficit, that would go a long way toward getting the United States back on the right economic path.

Unfortunately, Barack Obama has been negotiating a treaty in secret which is going to send the deindustrialization of America into overdrive.  The Trans-Pacific Partnership is being called the “NAFTA of the Pacific”, and it is going to result in millions more good jobs being sent to the other side of the planet where it is legal to pay slave labor wages.

According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.

So what will this country look like when we lose tens of millions more jobs than we already have?

U.S. workers are being merged into a giant global labor pool where they must compete directly for jobs with people making less than a dollar an hour with no benefits.

Obama tells us that globalization is good for us and that Americans need to be ready to adjust to a “level playing field”.

The quality of our jobs has already been declining for decades, and if we continue down this path the quality of our jobs is going to get a whole lot worse and our economic infrastructure will continue to be absolutely gutted.

At one time, the city of Detroit was the greatest manufacturing city on the entire planet and it had the highest per capita income in the United States.  But today, it is a rotting, decaying hellhole that the rest of the world laughs at.

In the end, the rest of the nation is going to suffer the same fate as Detroit unless Americans are willing to stand up and fight for their economy while they still can.

Weekly Time & Price analysis – W/C 7th April 2014

Hi All,

This week we come back to the mighty S&P500, I’ll provide a update to what to look for going forward in this post too.  But first let’s look at last weeks Call for the EURUSD.

We were looking for a LOW, in fact the time zone runs to the 18th April 2014 for a LOW point – so we are still within that zone in both Time and Price.

Right the S&P500, lets review the Price and Time zones and then look at the market itself from a technical point of view

Swing File Analysis

Weekly EURUSD - Time & Price

Projecting the END of the UPSWING on the WEEKLY EURUSD – in the zone now

Daily EURUSD - Time & Price

DAILY Analysis = looking for the LOW of this swing DOWN, again in the ZONE!

Fibonacci Analysis

Weekly EURUSD - Time & Price FIB

Daily EURUSD - Time & Price FIB

DAILY Analysis = Fib counts/analysis says Tuesday 22nd April has the highest number of hits – wait and see.

What to look for going forward – update:

S&P500

WTLFGF1

Look at the chart above, to be honest the critical information is shown on the chart, my words here are just to explain the detail in plain English so that my thoughts are clear.

The PINK horizontal line = a current SUPPORT shelf, If and how long it hold I have no idea (neither does anybody else)

ALL the moving averages are in Bullish mode, pointing up and separated nicely = UPTREND

The PINK moving average gives the impression that price found support at that level – it did, but the support occurred at the PRICE level NOT the moving average – think, on the days of support the moving average was one bar back, PRICE drags the moving averages along, the moving averages do NOT drag price – this is a classic ILLUSION to which people will say “Look, price found support at the MA level” It’s not true, it just happens that the MA met with price at those levels – why did the MA FAIL to support price in June 2013, August 2013, October 2013, Dec 2013?  BECAUSE price found support and the MA was not priced near enough to create the Illusion AND even if it were true that moving averages provide support NO-ONE can tell you in advance WHY or WHEN it will next happen, so there value is pretty limited in my book – BUT they [Moving Averages] are good at helping you see and identify the trend direction, although you could just get a line draw it on the chart and determine if it;s heading sideways, down or up and that would be just as good.

In Fact I will do a series on Trend Identification in the coming weeks

The Thick BLACK horizontal line is CRITICAL SUPPORT – If that level is broken – POTENTIALLY – the trend could have changed from UP to DOWN, BUT, that is not for certain – IF that happens it will be the biggest correction for a number of months – W.D. Gann said that when the size and time of a correction exceeds those of the past corrections in the trend watch out for a trend reversal – that’s exactly what we will do – KEEP WATCH.

You can see from careful study of the DAILY chart that Gann’s quote so far has FAILED – so far the largest corrections in Time and Price have FAILED to be reversal points!  Another “Market FACT” that in fact is a MYTH!  At some point Gann’s quote will come true, but I wonder after how many FAILURE POINTS!  (I reckon about 80% of what you learn about the markets is a load of crap – Elliott Wave and Gann included) But I also say that PARTS of Gann and Elliott Wave are genius and workable.

We now need to look at this S&P500 market in a different context – a higher time-frame chart to see the bigger picture – detail on the chart should be self-explanatory

WTLFGF2

Once those KEY support levels start to be taken out all you can do is watch to see where the market will find support – no-one knows where it will find support, people will try to guess such as 61.8% fib level of X-X, or 50% (not even a FIB level!) of X-X – but they never tell you EXACTLY which levels will provide the resistance or which high and low to work off, that’s because they DON’T KNOW, it;s all ifs and buts in the markets – at least I’m honest about it!

For me the crucial support levels are the ones I’m watching anything up to them is just market noise and a standard potential correction in progress.

Just remember that NO-ONE, me included knows exactly where and when this market will top or bottom out – If you throw enough guesses at the thing eventually you’ll get it right! BEWARE of predictions.

Oh and another point, people keep bleating on about QE1 turning the market in 2009 – QE1 was an accounting trick – no real money entered the markets! So how that managed to pump the market higher I’ll never know, if markets can rise on fresh air all we need is a giant fan aimed at the markets with a hint of QE rumour and they should propel ever more higher.

What to Look for going forward the next part will be posted in a month or so time – until that uptrend changes to do guess what the trend direction is?  Up that’s right

Hope it helps.

 

ESSENTIAL/MUST read

It’s not often that I do this – it’s a Saturday afternoon and I’ve interrupted my day to post this.

You have to read the March 2014 issue of Elliott Wave Theorist – it does mean BUYING it, you don’t obtain this type of information for free I’m afraid.  You will need to subscribe to the Elliott Wave Theorist to obtain March 2014 issue

You are highly unlikely EVER to read the content of the report in the mainstream media and it also helps to confirm/back-up what I’ve been saying about the Fed and USA Government.  If you’re an American then the implications are massive not only for your Investments but your lives, If you’re not an American citizen then it’s bound to have an impact on your Investments/Life to some degree – better to be prepared, than “suddenly out of the blue” find out

In fact this report/months EWT applies to EVERYBODY in the world, it is that important, all I can do is alert you (you can lead a horse to water, but you can’t force it to drink) you’ve been alerted!

Here’s a link:

http://www.elliottwave.com/r.asp?rcn=statgrphc&url=/wave/022114aff&tcn=ag022114&acn=hvt1211

This can ALWAYS happen ANYTIME

The charts below tell the story exactly, I did get caught out by one of them, but only for my allowable risk so nothing bad, just a potential trade that did not work out, it will eventually.

Yesterday was the UK Governments Budget day and within the budget there was a nasty surprise for pension companies hence the charts:

There’s nothing you can do, for those buy and holders who were long they got hammered, and this is one of the risked I’ve previously talked about for buy and hold investors.

This is a classic example of why it is so very important to have set, rigid stops in place all the time.

I’m willing to bet someone has lost thousands by being caught out by that move yesterday and today they’ll be fretting, stressing and trying to find logical reasons for price to bounce back up – to which they’ll either be holding on in hope and praying for a rise or applying illogical reasoning to their charts as to all the reasons a bounce should happen – it’s obviously up to the market to make that decision, they might get lucky, they might get hammered even more – no one knows!

I bet some people where short too and had some great, although very lucky, profits.

Always use a stop-loss, yes they’re are pain when they trigger, but they are there for a reason, you placed it at a specific place based on your rules of the set-up – the real reason we don’t like stop losses when they are hit is because they prove and confirm that our thoughts/plans and trading decision on that market was simply WRONG and we don’t like being wrong do we! Welcome to trading, we’re we are wrong a lot of the time – you have to learn to live with it and accept it, it is hard though.

Capture2

Capture

Capture1

Capture4

Russia Threatens To Abandon The U.S. Dollar And Start Dumping U.S. Debt

This is something that I became aware of a few days ago  – China have also said that they’d stand by Russia is recent developments too.

This article, courtesy and with thanks to http://theeconomiccollapseblog.com/ – if the content of the article happens could cause massive havoc and problems for those of us in Europe:

1) Energy supplies would be bad enough, not too bad as we’re on the verge of warmer spring weather (hopefully) but

2) The bond situation as mentioned below could break the USA economy, especially if both Russia and China join forces!

I’ve already reported of China and Russian bond and Gold holdings, if the Russians continue to play this as they have been doing it has the potential to snowball into an International problem of massive financial costs, let alone Human lives if military action happens off the back of it – scary times that need to be watched closely, as they will have a direct effect upon you in one or more ways if they continue.

Russia Threatens To Abandon The U.S. Dollar And Start Dumping U.S. Debt

Posted: 04 Mar 2014 01:57 PM PST

The Kremlin - Photo by Pavel KazachkovThe Obama administration and the hotheads in Congress are threatening to hit Russia with “economic sanctions” for moving troops into Crimea.  Yes, those sanctions would sting a little bit, but what our politicians should be made aware of is the fact that Russian officials are promising “to respond” if economic sanctions are imposed on them.  As you will read about below, one top Kremlin adviser is even suggesting that Russia could abandon the U.S. dollar and start dumping U.S. debt.  In addition, he is also suggesting that if sanctions are imposed that Russian companies would not repay the debts that they owe U.S. banks.  Needless to say, Russia could do far more economic damage to the United States than the United States could do to Russia.  The U.S. financial system relies on the fact that the rest of the planet is going to use our currency to trade with one another and lend gigantic piles of it back to us at super low interest rates.  If the rest of the world starts changing their behavior, we are going to be in a massive amount of trouble.  Those that believe that the United States is “economically independent” are being quite delusional.

In order for U.S. economic sanctions against Russia to be effective, Europe would also have to get on board.

But that simply is not going to happen.

As I noted yesterday, Russia is the largest exporter of natural gas on the planet.  And Russia is also Europe’s largest supplier of energy.

There is no way that Europe could risk having Russia cut off the gas, especially considering the economic condition that Europe is currently in.

To get an idea of just how incredibly dependent the rest of Europe is on Russian natural gas, check out the chart in this article.  A whole bunch of European nations get more than half their natural gas from Russia.

And according to the Telegraph, even the UK has already completely ruled out economic sanctions…

Europe would be pushed back into recession, Russia into financial meltdown. This is not the sort of self harm Europe is prepared to contemplate right now. Indeed, thanks to the indiscretion of a UK official, who was snapped going into Downing Street with his briefing documents on display for all the world to see, we know this to be the case. Trade and financial sanctions have already been ruled out.

So the U.S. can do whatever it wants, but Europe is not going to be any help.  Perhaps Canada will stand with the U.S., but that will be about it.

On the flip side, the Russian Foreign Ministry is promising “to respond” if the United States does impose economic sanctions…

Russia said on Tuesday that it would retaliate if the United States imposed sanctions over Moscow’s actions in Ukraine.

We will have to respond,” Foreign Ministry spokesman Alexander Lukashevich said in a statement. “As always in such situations, provoked by rash and irresponsible actions by Washington, we stress: this is not our choice.”

So what would the response look like?

Lukashevich did not say, but top Kremlin adviser Sergei Glazyev is suggesting that Russia could abandon the U.S. dollar and refuse to pay back loans to U.S. banks…

“In the instance of sanctions being applied to stated institutions, we will have to declare the impossibility of returning those loans which were given to Russian institutions by U.S. banks,” RIA quoted Glazyev as saying.

“We will have to move into other currencies, create our own settlement system.”

He added: “We have excellent trade and economic relations with our partners in the east and south and we will find a way to reduce to nothing our financial dependence on the United States but even get out of the sanctions with a big profit to ourselves.”

Glazyev also stated that Russia could start dumping U.S. debt and encourage other nations to start doing the same.  The following comes from a Russian news source

“We hold a decent amount of treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner,” he said. “We will encourage everybody to dump US Treasury bonds, get rid of dollars as an unreliable currency and leave the US market.

Clearly Russian officials understand the economic leverage that they potentially have.  In fact, Glazyev seems fully convinced that Russia could cause “a crash for the financial system of the United States”

“An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system.”

On that last point Glazyev is perhaps overstating things.

On their own, the Russians could do a considerable amount of damage to the U.S. financial system, but I doubt that they could completely crash it.

However, if much of the rest of the world started following Russia’s lead, then things could get very interesting.

Just yesterday, I wrote about how China has chosen to publicly stand in agreement with Russia on the Ukrainian crisis.

If China also decided to abandon the U.S. dollar and start dumping U.S. debt, it would be an absolute nightmare for the U.S. financial system.

And keep in mind that the Chinese were already starting to dump a bit of U.S. debt even before this latest crisis.  In fact, China dumped nearly 50 billion dollars of U.S. debt in December alone.

The only way that the current bubble of debt-fueled false prosperity in the U.S. can continue is if the rest of the world continues to lend us trillions of dollars at ridiculously low interest rates that are way below the real rate of inflation.

If the rest of the world stops behaving in such an irrational manner, interest rates on U.S. government debt would rise dramatically and that would also mean that interest rates on virtually all other loans throughout our financial system would rise dramatically.

And if that happened, it would be a complete and utter nightmare for our economy.

Unfortunately, most Americans have no understanding of these things.  They just assume that we are “the greatest economy in the world” and that nothing is ever going to threaten that.

Well, the truth is that we are rapidly approaching a “turning point”, and after this bubble of false prosperity pops things will never be the same in the United States again.

The Kremlin - Photo by Pavel Kazachkov