Money Flow Trading Method along with Risk Management

MORE NEGATIVE REPORTS JUST OUT ON GDP not yet factored into the markets.

https://www.calculatedriskblog.com/2...alculated+Risk)

Following the weak retail sales report, Q4 GDP estimates have been revised down.

From Goldman Sachs:
The retail sales report indicated a considerably weaker pace of fourth quarter consumption growth than we had previously assumed. Reflecting this and lower-than-expected November business inventories, we lowered our Q4 GDP tracking estimate by five tenths to +2.0% (qoq ar).
From Merrill Lynch:
Weak retail sales data and inventory build caused a 0.8pp decline in our 4Q GDP tracking estimate to 1.5% from 2.3%


Weekly Schedule

Read more at https://www.calculatedriskblog.com/2...frfv7IhbBcl.99

So 3 Forex Trades and Net Profit of $903.00 US dollars.

Almost 2% for the day and 3 trades. So now you can see how I reach my personal target of 20% Return on Investment each and every month that I trade and teach Forex.


Benjamin

http://traderfeed.blogspot.com/2019/...f-trading.html

THURSDAY, FEBRUARY 14, 2019
Taking The Ego Out Of Trading
https://4.bp.blogspot.com/-t8Ct7s6VZ...s/s320/Ego.jpg
The central hypothesis of the book that I am writing on trading and spirituality is that the major emotional challenges of trading are due, not to intractable psychological problems, but to the intrusion of our egos into decision-making processes.

What we attach our egos to controls us.

If trades and trading are our only activities filled with purpose, we will overtrade. If we judge our success and failure by profits and losses, our moods will rise and fall with market conditions.

It sounds so great: the "passion" for trading. Too often, however, that belies an ego-attachment to trading.

So how do we take the ego out of trading?

By tapping into the soul.

Meaningful relationships tap into the soul. Worthy causes and challenges speak to the soul. Appreciation of the world--from art and music to travel--nourishes the soul. Our religious beliefs awaken the soul. Playing an important role in the lives of others, developing our potential in various life areas, learning and creating new things--all take us out of our narrow egos and connect us with larger meanings and purposes.

We take trades we shouldn't and avoid the ones we should because we're using the ego of trading to fill soul needs. If we work on our trading to the point of neglecting the rest of our lives, we are like bodybuilders who obsessively develop their upper bodies while their middle sections go flabby and their legs are like twigs.

A great first step in taking the ego out of trading is evaluating our trading by process criteria, not by profits and losses alone. If we focus on placing good trades, our trading can build mindfulness, intentionality, and resilience.

At the end of the day, however, trading cannot sustain us always, in all ways. We need not just the pleasures, victories, and gratifications of the ego, but also the energy, connectedness, and fulfillment of the soul. It is amazing how much easier it is to tackle trading challenges when trading is not burdened with needs it was never meant to fill.

The question is not simply whether we live a successful life or an unsuccessful one. The question is whether we live a full life or an empty one.
Further Reading:

The Psychology of Trading Without the Ego

TraderFeed Home Page and Index
.Posted by Brett Steenbarger, Ph.D.at 5:31 AM

http://www.whatdoesitmean.com/index2789.htm

February 15, 2019
US Warplanes Poised To Destroy Pakistan Nukes As India Readies For “Unforgettable Lesson” Retaliation

By: Sorcha Faal, and as reported to her Western Subscribers

A gravely worded new Ministry of Defense (MoD) report circulating in the Kremlin today states that American F-35B Lightning II stealth fighter jets with the fixed-wing detachment of Medium Marine Tiltrotor Squadron 262, 31st Marine Expeditionary Unit (MEU) have broken off bombing drills in the Philippine and East China Sea region and are now racing towards the Indian subcontinent in preparation for their attacking and destroying Pakistan’s nuclear weapons arsenal—a war response preceded by Pakistan’s complicity in the worst in history unprovoked attack on Indian military forces in Kashmir—a vile attack President Putin quickly condemned with his declaring that the perpetrators must be immediately punished—who was followed by President Trump, likewise, condemning this attack and ordering Pakistan to immediately end support and safe haven to all terror groups—and in response to saw Indian Prime Minister Narendra Modi addressing his nation just hours ago saying he has now unleashed the full power of India’s military and vowing that “1.3 billion angry Indians will reply to this attack”—a vow followed by Indian Foreign Minister Arun Jaitley warning that “India will deliver an unforgettable lesson in retaliation”—but that now has the entire world holding its breath wondering if India can avenge this unprovoked attack without risking an all out nuclear war. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

http://www.whatdoesitmean.com/jake2.jpg

http://www.whatdoesitmean.com/jake3.png

According to this report, Kashmir is located in the northernmost geographical region of the Indian subcontinent and has been embroiled for decades in a territorial dispute between India, Pakistan and China—with India controlling approximately 43% of the land area of the region and 70% of its population—Pakistan controlling roughly 37% of the land—while China controls the remaining 20%--and is why this region is regarded as the world's most militarized zone—and that has witnessed three major wars between India and Pakistan, another limited war between India and China, numerous border skirmishes, high mountainous warfare, an ongoing insurgency, a Hindu exodus and internal civilian unrest.


The greatest threat to Indian controlled Kashmir, this report explains, is the Pakistan-based terrorist organization Jaish-e-Mohammad (JeM)—whose leader Masood Azhar is India’s most wanted terrorist, but whom China keeps blocking from being placed on the UN terror list—and whom most shockingly is allowed by Pakistan to roam free while he and his terrorist organization carry out repeated terrorist attacks against India.

http://www.whatdoesitmean.com/jake4.jpg

Jaish-e-Mohammad terror leader Masood Azhar (above right) is protected by both Pakistan and China

On 14 February 2019, this report grimly notes, a bus convoy of Central Reserve Police Force (CRPF) troops (India’s largest paramilitary organization) were traveling in Kashmir when they were attacked by a young suicide bomber named Adil Ahmad Dar—who upon detonating his bomb killed at least 44 of these Indian police forces—an attack quickly celebrated by the Jaish-e-Mohammad terror organization who released a video of this suicide bomber showing that he had joined them this past March-2018.

http://www.whatdoesitmean.com/jake1.jpg

Jaish-e-Mohammad releases video of their terrorist suicide bomber Adil Ahmad (above left) vowing more attacks are to come

Most gravely to be noted about this unprovoked terror attack, this report concludes, is its timing coming just ahead of the crucial nationwide Indian general election to be held in April and May—none of whose current political leaders running in will have a chance of being elected unless they immediately smash the terror organization Jaish-e-Mohammad and the Pakistan government protecting it—and is why Prime Minister Modi has just told the Indian people that “soldiers have been given full freedom” to retaliate—a “freedom” that now places India’s nuclear weapons under military, not political control—and whose military forces have just declared “we will not forget, we will not forgive”—leaving only unanswered as to how the world can keep World War III from igniting as the United States will move to protect India at all costs, while China will do the same to protect Pakistan.

http://www.whatdoesitmean.com/jake5.jpg

February 15, 2019 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.


[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the manybu catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human beings right to know the truth. Due to our missions conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]


[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]

War Has Just Been Declared On Me, On Me Personally—Now I Am Alone, On Enemy Territory

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Come on!!
Dismal data this morning from import, export prices to industrial production has sparked a comical buying panic - Dow futures are up 500 points off overnight lows...
https://zh-prod-1cc738ca-7d3b-4a72-b...15_6-43-30.jpg
But while The Dow has gone vertical, Nasdaq is fading from the cash open...
https://zh-prod-1cc738ca-7d3b-4a72-b...15_6-47-49.jpg
Stocks remain decoupled from bond reality...
https://zh-prod-1cc738ca-7d3b-4a72-b...15_6-50-35.jpg
And finally there is this!!
https://zh-prod-1cc738ca-7d3b-4a72-b...15_6-52-40.jpg



COMMENTS FROM BENJAMIN: WE do not have FREE Markets and that is why trading by charts alone is a GUARANTEE of Forex trading failure.

World News

https://finviz.com/news.ashx?v=2

World Futures

https://finviz.com/futures.ashx

Forex Prices

https://finviz.com/forex.ashx

Cryptocurrency Prices

https://finviz.com/crypto.ashx

Bond & Notes Charts

https://finviz.com/futures_charts.ashx?t=BONDS&p=d1

Charts 10 Year Notes

https://finviz.com/futures_charts.ashx?t=ZN&p=d1

Charts 5 Year Notes

https://finviz.com/futures_charts.ashx?t=ZF&p=d1

Charts GOLD

https://finviz.com/futures_charts.ashx?t=GC&p=m5

Charts DJIA DOW 30

https://finviz.com/futures_charts.ashx?t=YM&p=m5

Charts 2 Year Notes

https://finviz.com/futures_charts.ashx?t=ZT&p=d1

Charts USD

https://finviz.com/futures_charts.ashx?t=DX&p=m5

Charts Euro EUR/USD

https://finviz.com/forex_charts.ashx?t=EURUSD&tf=m5

Charts British Pound GBP/USD

https://finviz.com/forex_charts.ashx?t=GBPUSD&tf=m5

Charts YEN USD/JPY

https://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5


Benjamin

Congrates Benjamin for your great achievement. This is what I wish to learn.

Do you want me to email you personally?? Can I have your email plz.



Thanks,

Benjamin, did you get my PM?

I will look at it now. I was not trading as we have RISK ON all day.

Here are your good questions. You should post all questions here so we all can share the information. Have you opened your new FXCM UK demo account as yet ?

With reference to your Post# 5742., great achievements., here are the questions:-

What is your daily routine for trading, I mean what would you do first, then next,
And so on till trading ends, I want to follow you step by step.

Benjamin: I for the moment am not trading with Frankfurt starting at 2:00 AM Eastern Standard Time. I start my Forex trading day now at 6:00 AM.

As for my routine just follow my posts in this thread.

1)Do you always go for SHORT, because of RISK OFF?? So no LONG for you??
2)What would be my first step, to wake up at 2.00am midnight at the Frankfurt open??
3)When do DAX, FTSE & CAC start??

Benjamin: I go long and short depending on my Forex trade plan and the trend of the currency or CFD that is in my trade plan.
For Gold and Silver I go long.
DAX, FTSE and CAC all start at 3:00 AM and Close at 11:30 AM each day except Saturday and Sunday.


Benjamin

" It was RISK ON, all day "., could you plz explain. thanks,

February 15, 2019
The VIX Is Warning Something Massive is About to Hit
The next leg down is just around the corner.


The markets have been warning of this for some time (as I’ve noted in recent weeks) but the move finally appears to have arrived.


The VIX collapse that accompanied the rally in risk assets starting December 24 2018 is about to end; the VIX is coiling tighter and tighter in a bullish falling wedge formation.


The coming breakout will be truly spectacular.
https://ci3.googleusercontent.com/pr...a0114f25ed0-v2


Moreover, this breakout is starting at a higher level than the one that was triggered by the 2018 collapse in the Short Volatility trade. From a technical analysis perspective, you would call this a higher low. This suggests that the VIX will soon spike even higher than it did in 2018.
https://ci5.googleusercontent.com/pr...280b8aa2dea-v2


Indeed, the long-term monthly chart of the VIX suggests a move to AT LEAST 40.
https://ci5.googleusercontent.com/pr...dca2f56b12d-v2


For stocks this will mean a retest of the recent lows, possibly something worse.
And deep down, the market knows it.
https://ci6.googleusercontent.com/pr...c921509a351-v2


A Crash is coming...
With that in mind, I’m actively preparing clients of my weekly trading service Private Wealth Advisory with our proprietary CRASH trades to profit from the coming market collapse.


As I write this they are all EXPLODING HIGHER.

It is RISK ON when the markets go up as now in the Dow 30 being over 300 points most of the day. So GREEN is UP and RED is Down. That is why I wait until 8:30 AM to see where we are starting from.


Benjamin

For you might be newbie/childish question, but for me, to gain my knowledge., so when DOW30 was UP, over 300 points, but you DID NOT go for LONG??

Instead of waiting to RISK OFF, could you plz explain again??

My friend, No question is silly or should not be asked. In fact your question is excellent because you have touched on a very important point. We first determine the TREND of any of our Forex trade plans. So knowing that the TREND in Dow 30 is down even if it goes up, then we SHORT it when we see that it now has RISK OFF.

Here is where we can use charts and supply and demand and maybe even price action. You can post charts if you like here like we used to do. I can also teach you on some of the better indicators such as SAR and others.

Have a nice weekend and call me whenever you need to and please open up your new FXCM UK demo account if you have not as yet.


Benjamin

thanks for your explanations, yes I would keep in touch with you on phone.
you too have wonderful long weekend. do you guys have Monday off, family day?

https://www.zerohedge.com/news/2019-...ops+to+zero%29

When asked about any "bad behavior" he sees in the system today, his attention turned to money printing.


He told Becky Quick: "Well, nobody knows how much of this money printing we can do. And of course we have politicians who like-- and are in both parties, who like to believe that it doesn't matter how much you do. That we can ignore the whole subject and just print money as convenient. Well, that's the way the Roman Empire behaved, then it was ruined.

And that's the way the Weimar Republic was ruined. And-- it's-- there is a point where it's dangerous. You know, and of course, my attitude when something is big and dangerous is to stay a long way away from it. Other people want to come as close as possible without going in. That's too tricky for me. I don't like it."

He continued, slamming economists who claim they know how QE will pan out in the long run: "we're using methods that are so extreme that maybe we can't use a lot more of them. And we don't know the answer to that. If an economist told me he knew the answer to that, I wouldn't believe him. Either way. It wouldn't matter which way his opinion was. I just think we don't know."


Munger also had some choice words for Eddie Lampert's attempted turnaround of Sears: “If you take on the job that’s impossible to do, you’re going fail at it.

That’s the lesson."

He also claimed there was a lack of opportunities to deploy capital at Berkshire Hathaway. “We’ve had a long drought in terms of buying a big company and we don’t like it. But if we have to go through a much longer drought, we can handle it,” he said.

Finally, prompted by a question about his own hiring adage that "The guy with the IQ of 150 who thinks its 170 will kill you", Munger quipped back "You must be thinking about Elon Musk".

1. Post 1,985
2. Cleanup
3. Quote
4. Feb 11, 2017 7:56am | Edited at 9:05am

1. https://cdn-assets.faireconomy.media...ar392875_1.gif BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 4,815 Posts | Online Now

Quoting BenjaminIs
{quote} Good Day Forex Traders and a Special Good Morning to KeepCalmfx I am going to link an article and video that I listened to this morning when I woke up. It is without any question the most important and relevant video that I have heard in the last six months. I have been reading and getting information from Grant Williams for over 10 years so when he explained so clearly what will happen in the future and why anyone that wants to take the time will have an incredible EDGE over most people in the world including so called experts that are...

Good Day Forex Traders

The following is from post 1974 by KeepCalmfx

Quoting BenjaminIs
{quote} KeepCalmfx I will answer the question and the answer is directed only at you since you have seen one of my real Forex trading accounts of $100,000 US Dollars. This in my opinion is a once in a lifetime situation as relates to the Euphoria in the markets. I refer to the fact or opinion that US 30 must go back below 19,500. In the past I would trade around my losing positions on a daily basis so that eventually I would make substantial profits and then close the losing positions. I was as I stated Short 5 positions of 100 units of US 30. I...
Hi Benjamin (And Good Day to everyone else.)

Thank you for your post.

With all these articles that we have read over the past month it is very clear what the big picture and facts are, but the masses are still trading on the perception, following the herd.

As we also can see is that the markets are very confused at the moment with all the uncertainty and the unpredictable actions of the president.

In my opinion it is very important to know when to trade and when to stay out of the markets.
I agree with you Benjamin, someone like yourself with your experience and expertise can trade the current market, but I think currently with everything that is going on it is better just to stand on the side-line, which is very hard for me to do. Lol.

COMMENTS FROM BENJAMINIS: I woke up this morning and the first thing that I did was to read the Grant Williams article concerning his presentation in London last December 2016. He solved the PUZZLE and put all the pieces together for myself. I can now share it here this morning with everyone who reads our thread and is interested to see into the future.

The way that I will do it is to take the relevant sections of the presentation and add my comments after the sections that I post from the original article. I listened to the video and now will deal with the words that came along with the video of 34 minutes ad 59 seconds.


Good Day Forex Traders and a Special Good Morning to KeepCalmfx

I am going to link an article and video that I listened to this morning when I woke up.

It is without any question the most important and relevant video that I have heard in the last six months.

I have been reading and getting information from Grant Williams for over 10 years so when he explained so clearly what will happen in the future and why anyone that wants to take the time will have an incredible EDGE over most people in the world including so called experts that are part of the financial world community.

http://www.zerohedge.com/news/2017-0...at-comes-after


Grant Williams: The Death Of The Petrodollar, And What Comes After
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Feb 9, 2017 7:55 PM

In December, Grant Williams, author of "Things That Make You Go Hmm..." offered the most comprehensive analysis yet of the rise and inevitable fall of the petrodollar (and implicitly US hegemony). In the following presentation, from Mines & Money Conference in London in December 2016, Williams focuses on gold's performance in 2016, the reaction to Donald Trump's election and joins a series of dots that may lead to the end of the petrodollar system and a new place for gold in the global monetary system.

Grab a glass fo wine - turn off Trump's twitter feed for 30 minutes and enjoy. Here is the full presentation - "Get It. Got It. Good"


This presentation follows on from his "Nobody Cares" analysis.
* * *
http://www.zerohedge.com/sites/defau...20petrod_0.jpg
The story begins in the 1970s when Henry Kissinger and Richard Nixon struck a deal with the House of Saud — a deal which gave birth to the petrodollar system.

The terms were simple The Saudis agreed to ONLY accept U.S. Dollars in return for their oil and that they would reinvest their surplus dollars into U.S. treasuries.

In return, the U.S. would provide arms and a security guarantee to the Saudis who, it has to be said, were living in a pretty rough neighbourhood. As you can see, things went swimmingly (chart below)
http://www.zerohedge.com/sites/defau...trod%201_0.jpg
Saudi purchases of treasuries grew along with the oil price and everyone was happy. (We’ll come back to that blue box on the right shortly)
The inverse correlation between the dollar and crude is just about as perfect as one could expect (until recently that is... but again, we’ll be back to that).
http://www.zerohedge.com/sites/defau...rodd%202_0.jpg
And, as you can see here, beginning when Nixon slammed the gold window shut on French fingers and picking up speed once the petrodollar system was ensconced, foreign buyers of U.S. debt grew exponentially.

Having the world’s most vital commodity exclusively priced in U.S. dollars meant everybody needed to hold large dollar reserves to pay for it and that meant a yuuuge bid for treasuries. It’s good to be the king.
http://www.zerohedge.com/sites/defau...trod%203_0.jpg
By 2015, as the chart on the next page shows quite clearly, there were treasuries to the value of around 6 years of total global oil supply in the hands of foreigners (if we assume a constant 97 million bpd supply which I think is a pretty reasonable estimate).

Now... with that brief background on the petrodollar system, here’s where I need you to stick with me. I promise you it’ll be worth the mental effort
Ready? Here we go.

Now, back in 2010, then-World Bank President Robert Zoellick caused something of a commotion when he suggested that an entirely new global monetary system maybe wasn’t such a bad idea.

The system he had in mind involved a freely-convertible Yuan and, controversially was constructed around gold as its central reference point:
(Robert Zoellick, November 8, 2010): …the G20 should complement this growth recovery programme with a plan to build a co-operative monetary system that reflects emerging economic conditions. This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalisation and then an open capital account.

The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.

In seemingly unrelated news, two years later, Iran began accepting Yuan in payment for its oil amid US sanctions. The transactions were conducted through Russian banks:
(Financial Times, May 2012): Iran is accepting renminbi for some of the crude oil it supplies to China…

…Tehran is spending the currency, which is not freely convertible, on goods and services imported from China…

The trade is worth as much as $20bn-$30bn annually according to industry estimates…

The renminbi purchases began some months ago…much of the money is transferred to Tehran through Russian banks, which take large commissions on the transactions…

Beijing has been trying to get its trading partners to use the renminbi, in effect transferring the exchange rate risk to its counterparties, since the price of crude is set in US dollars. It also frees Beijing of the need to hold as many dollars in its reserves.

The crucial part of this deal was that, by diversifying their purchases in this way, the Chinese had found a path towards not only needing to hold fewer U.S. dollar reserves, but to circumventing the petrodollar system altogether.

By 2013, the penny had clearly dropped at the PBoC who declared an end to the era of their accumulation of U.S. treasuries:
(Bloomberg, November 2013): The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.

“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range

Yes, it was, apparently “no longer in China’s interest” to accumulate foreign exchange reserves.
Sure enough, in 2014, global FX reserves began to decline at the fastest rate in 80 years as you can see from this chart:
http://www.zerohedge.com/sites/defau...trod%204_0.jpg
That same year, another piece of the puzzle was laid in place when Xu Luode, the Chairman of the newly-founded Shanghai Gold Exchange, explained that gold would be priced and sold in Yuan as a step towards what he called the “internationalization of the renminbi” (for those of you confused by Yuan and Renminbi, just think of them as the Chinese equivalent of ‘Pound’ and ‘Sterling’):
(Xu Luode, Speech to LBMA, May 2014): Foreign investors can directly use offshore yuan to trade gold on the SGE international board, which is promoting the internationalization of the renminbi…

Shanghai Gold will change the current gold market “consumption in the East priced in the West” situation.

When China will have a right to speak in the international gold market, pricing will get revealed…

Interestingly, Luode acknowledged what he accurately described as the “consumption in the East, priced in the West” situation and assured the world that the ‘real’ price of gold would become apparent once China took its rightful place at the centre of the gold market.

We can but hope he is correct. When that day comes, the change on the world's gold markets will be unprecedented.

In 2015, another announcement slipped by the world when it was revealed that Russia’s Gazprom would also begin selling oil to the Chinese in exchange for yuan and that they were negotiating further agreements to use rubles and yuan to settle natural gas trading directly, without the need for dollars:
(Moscow Times, June 2015): “Two state energy companies, gas producer Gazprom and its oil arm Gazprom Neft, said they would use more Chinese currency in trade, while Russia’s largest bank, Sberbank, has also promoted the use of the yuan…

Gazprom Neft announced that it began settling shipments of oil to China in yuan. And previously, the head of Gazprom, Alexey Miller, said in a TV interview that the company was negotiating with China to use yuan and rubles for gas deliveries via a planned pipeline in Western Siberia.
OK... hands up if you’re still with me... great!

Oh... you’re reading this so I can’t see you but hopefully you’re following the dots...
For those of you who aren’t, here’s a little recap of where we are so far to help you get things into the right order before we push on to the end:
http://www.zerohedge.com/sites/defau...trod%205_0.jpg
Get it? Got it? Good.

So... here we are, in 2016 and, as it turned out, April was a hell of a month if you were paying attention.
Firstly, the Saudis threatened to sell almost a trillion dollars of U.S. assets—including over $300 billion of treasury bonds—should a bill be passed by the congress allowing the Saudis to be held responsible for the 9/11 attacks:
NY Times, April 16, 2016): Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the 9/11 attacks.

Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom’s message personally last month during a trip to Washington, telling lawmakers that Saudi would be forced to sell up to $750B in treasury securities & other assets in the US before they could be in danger of being frozen by American courts.

In a rare show of bipartisanship, the bill was subsequently passed before being vetoed by President Obama who then had to watch in ignominy as he suffered the first veto override of his presidency.

Just days later, the Saudis were the cause of a seemingly surprise failure by OPEC to agree a production cut as the oil price languished in the low-$30s:
(Wall Street Journal, April 17, 2016): DOHA, Qatar—Oil producers that supply almost half the world’s crude failed Sunday to negotiate a production freeze intended to strengthen prices.

The talks collapsed after Saudi Arabia surprised the group by reasserting a demand that Iran also agree to cap its oil production.

Oil prices had rallied in recent weeks on speculation that Saudi Arabia might successfully lead an initiative between members of the Organization of the Petroleum Exporting Countries and Russia, which joined the talks.

A deal would have marked a new level of cooperation between non-OPEC countries and OPEC members that producers hoped would keep prices above January lows of $26 a barrel.

Just 48 hours after that surprise, the Chinese finally launched their twice daily gold fixing, setting the price at 256.92 yuan per gram:
(Bloomberg, April 19, 2016): China, the world’s biggest producer and consumer of gold, started a twice-daily price fixing on Tuesday in an attempt to establish a regional benchmark and bolster its influence in the global market.

The Shanghai Gold Exchange set the price at 256.92 yuan a gram ($1,233.85 an ounce) at the 10:30 a.m. session after members of the exchange submitted buy and sell orders for metal of 99.99 percent purity.

“This is a very important development and will obviously be very closely watched,” said Robin Bhar, an analyst at Societe Generale SA in London. “But as long as it exists inside a closed monetary system it will have limited global repercussions. It could be a very important development if the new benchmark is a precursor to greater use of gold in the Chinese monetary system, Kenneth Hoffman…said by e-mail on Monday. It may also boost interest in the Shanghai free-trade zone, he said.

As Soc Gen’s Robin Bhar correctly identified, if the ability to trade gold for yuan exists within a closed monetary system, its importance will be limited BUT, as Bloomberg’s Ken Hoffman also correctly pointed out, if this was the thin end of the wedge, things could get very interesting indeed. Now, this chart shows the oil price going back to before the U.S. Civil War:
http://www.zerohedge.com/sites/defau...trod%206_0.jpg
Between 1865 and 1973, the price of oil was incredibly stable against a backdrop of perhaps the greatest simultaneous economic, demographic and technological expansion in human history.

How was that possible?

Well simply put, because oil was effectively priced in gold.

However...
Once the gold window closed and the petrodollar system was implemented, the price of oil soared 50-fold in just 35 years.

The move on the right? With the question mark against it? We’re getting there, I promise.

Now, you remember this next chart and the yuuuuuge supply of treasuries which exists compared to oil now? Well, when we add in the roughly $100 trillion in boomer entitlements that will need to be paid for by issuing—you guessed it, more treasuries—the chart changes somewhat:
That red circle down at the bottom of the second chart is the spike you see on the first chart.
http://www.zerohedge.com/sites/defau...debt%201_0.jpg
Ruh-roh!

It’s safe to say that, relative to even oil, and without any infrastructure spending by Donald Trump, treasuries are going to be.... abundant in the coming years.
Conversely, if we look at the value of gold relative to foreign-held treasuries, we see an altogether different story unfold.

During Reagan’s presidency, US treasuries were backed 132% by the market value of the country’s gold reserves.

Today, that number has fallen to just 4.7%

If we do the same thing and account for the $100 trillion in entitlement promises, as you can see from the chart on the next page, the number falls to 0.3% in 2025.

So the second chart (below, right) should come as no surprise to anybody.
http://www.zerohedge.com/sites/defau...a%20tsys_0.jpg
Yes, the Chinese have started to do what they promised to start doing, when they promised to start doing it.

Now, this next part of the presentation was a rattle through a whole bunch of charts showing the recent activity in the U.S. treasury, corporate bond, agency bond and securities markets so you’ll have to brace yourself.

The charts will appear on the next page.

Chinese sales of US treasuries (1) have been consistent for the last three years...
...as have their sales of US securities (2) since 2015 after plateauing in 2013 when treasury divestiture began Concurrently, Chinese sales of corporate bonds (3) have accelerated over the same period...
...though agency sales (4)—despite a few periods of consistent selling—have yet to follow suit.

But now, as tensions rise and the cross-currents get harder to discern, guess who else has showed up as a seller?


That’s right, the Saudis are now steady sellers of US treasuries (5)...
...and even more aggressive sellers of U.S. securities (6)...

Meanwhile, taking a broader view, net foreign purchases of treasuries, according to the TIC data, have been in a clear downtrend since 2009 (7) and have been largely outflows for the last three years.

If we look at the 12-month sum of sales (8), we see an even sharper decline...
http://www.zerohedge.com/sites/defau...20charts_0.jpg
...and if we take the trailing net official demand chart for treasuries back to 1979, the scale and extent of the change is evident—as are the catalysts for the acceleration (and we’re back on this page once again):
http://www.zerohedge.com/sites/defau...20demand_0.jpg
Take a long, hard look at that last chart folks—particularly within the context of the bond bull market and the ‘bid’ for treasuries we’ve seen throughout 2015 and 2016...


Meanwhile, the Russians—who, as we’ve seen are now selling oil for yuan to the Chinese, remember?— have been picking up the pace of their accumulation of gold reserves yet again, with the most recent monthly data setting yet another record...

...and the pick up in pace is evident when we look at average monthly purchases prior to 2013 and post the agreements put in place around that time between the various parties. Now, the next chart (top of the following page) is crucial to understand because a look at the market value of Russia’s gold reserves shows just how crucial their ongoing accumulation of bullion has been for the country’s finances over the last two years...
...and that increase in value has cushioned the effects of, amongst other things, the bailing out of the ruble.
http://www.zerohedge.com/sites/defau...dings%20_0.jpg

As you can see from the green line, Russia’s gold reserves in Ruble terms have soared as the country’s currency has weakened—something which confounded all the doommongers who called Game Over for Russia amidst sharply declining oil revenues:
(Bloomberg, April3, 2015): Here’s why Governor Elvira Nabiullina is in no haste to resume foreign-currency purchases after an eight-month pause: gold’s biggest quarterly surge since 1986 has all but erased losses the Bank of Russia suffered by mounting a rescue of the ruble more than a year ago.

While the ruble’s 9 percent rally this year has raised the prospects that the central bank will start buying currency again, policy makers have instead used 13 months of gold purchases to take reserves over $380 billion for the first time since January 2015.
Hmmm...


Now, crucially, being given the ability to sell oil to the Chinese for yuan and buy gold with that same yuan directly through the Shanghai Exchange has completely changed the game for the Russians and those changes are being reflected where they matter most—in the energy markets, the supply/ demand dynamics of which are quietly morphing in plain sight.

By August of this year, Russia had overtaken Saudi Arabia as the largest exporter of oil into China...:
(Al Awsat, August 3, 2016): During the first seven months of this year, China imported about 30.5 million metric tons of Saudi oil, a 0.4% decrease than that of last year. Whereas, China imported about 29.5 million metric tons of Russian oil with 27% increase than last year.
...and that wasn’t something the Saudis could take lying down:
Amid this fierce competition, it is important for Saudi Arabia to fortify its oil position in China with more political and strategic support
On the contrary, they rededicated their efforts to increase what they call “political and strategic support” for China.

Now, I hope you’re all still with me because here’s where we get to the final piece of this glorious puzzle—the piece that ties all these seemingly unrelated threads together: China’s own crude oil futures contract, to be priced in Yuan and traded at the Shanghai International Energy Exchange—a yuan contract which will be made fully-convertible:
(Bloomberg, November 5, 2015): By the end of 2015, China, the world’s No. 1 oil importer as of April, may start its own crude futures contract.

The idea is to establish a Chinese rival to the world’s two most traded oil contracts: West Texas Intermediate, housed on the New York Mercantile Exchange, and Brent Crude Futures, owned by ICE Futures Europe in London.

The yuan-based contract will trade on the Shanghai International Energy Exchange and will be among the first Chinese commodity contracts available to foreign investors as China promotes global use of its currency…

Participation will be open to all foreign investors and the yuan will be fully convertible under the contract, according to Song Anping, the chairman of the Shanghai Futures Exchange.


As you can see from the date of the article, this contract has been postponed several times— ostensibly for reasons such as stock market volatility in China, but perhaps there is more going on behind the scenes that is causing the delay because, once this contract is in place, things change.
Dramatically.

In the interim, China has supplanted the U.S to become the world’s biggest importer of oil, which serves to increase both its importance in the oil markets and the likelihood of it launching its own yuan-denominated contract at some point in time:
(Bloomberg, October 13, 2016): China is now the world’s biggest oil importer, unseating the U.S. The country’s crude imports climbed to a record 8.08 million barrels a day in September, a year-on-year increase of 18 percent, customs data released Thursday showed.

So, the world’s largest exporter of oil is now dealing with the largest importer directly in yuan and it has the ability to convert those yuan proceeds into physical gold through the Shanghai exchange— which the data suggest it is doing as fast as possible.

Currently, the bilateral oil for gold trade is only available to what the U.S. would no doubt consider a 'basket of deplorables' in Iran and Russia...but just think what happens once that fully convertible oil contract is up and running...?

Suddenly, the availability to price oil in gold is available to everybody and, given rising Saudi/U.S. tensions and the Middle East nation’s recent rededication to providing “political and strategic support” to China it’s easy to see why this would be attractive to the Saudis, for example.
http://www.zerohedge.com/sites/defau...lorables_0.jpg

Whatever happens, opening that contract creates a market-wide arbitrage opportunity which affords anybody with oil to sell the ability to exchange said oil for gold and anybody wanting oil to acquire it cheaply by buying cheap gold in the West and shipping it to Shanghai or HK where it can be sold for yuan.

Already, places like Tokyo, Seoul and Dubai are opening physical gold markets and discussing linking their nascent markets for bullion to the Shanghai exchange which has rapidly become the largest physical delivery market in the world.

Now, were this arbitrage to begin happening in any meaningful size, with the market for oil far bigger than that for gold, it would immediately be evident in the ratio between the two commodities...
...which, interestingly, is precisely what has happened since the peak of global reserves in 2014 and the Sino-Russian agreement to essentially transact oil for gold. With those conditions in place, the gold/oil ratio has broken out to its highest level in 80 years (chart, next page):
...which brings us right back to the question mark on the second chart which we left hanging like a matzah ball earlier in this presentation
http://www.zerohedge.com/sites/defau...%20ratio_0.jpg

The recent move in the oil price looks to me suspiciously like a sign that a move has started to return to pricing oil in gold.

That move, if indeed it is happening beneath the surface, allied with the endless possibilities enabled by the potential full convertibility of the yuan under the Shanghai-based oil contract leaves oil producing nations with a rather obvious choice for the first time in almost half a century—a choice made perfectly clear by the two charts on the next page:
If you are an oil producing country, do you...:
MINIMIZE your production in order to MAXIMIZE your holdings of one of the most abundant and easily-produced commodities in the world—U.S. treasuries—as has been the case for the last 40 years... knowing full well that, with the level of entitlements due in the next decade, more will need to be printed like crazy?
http://www.zerohedge.com/sites/defau...20petrod_0.jpg

Or......
Do you MAXIMIZE production in order to gain the largest possible market share in the biggest oil market in the world and, through the ability to buy gold for yuan, thereby maximize your reserves of a scarce, physical commodity which is impossible to produce from thin air and which happens to be not only the most undervalued asset on the planet, but is trading at its most undervalued relative to U.S. treasuries in living memory?
http://www.zerohedge.com/sites/defau...trod%202_0.jpg

With an annual production of $170bn, gold is by far the largest metal market by value.

However, that figure is dwarfed by the oil market which is 10x the size of the gold market on an annual production basis.
http://www.zerohedge.com/sites/defau...arket%20_0.jpg

If we throw in the average annual foreign holdings of U.S. treasuries over the last 2 years, we see that the ‘other’ commodity is at a different magnitude altogether.


So, which one of these commodities has any scarcity value? Given the choice, which one would you seek to maximize your holdings of?
U.S. treasuries which can be conjured out of thin air by the U.S. government and which, are described thus by The Securities Industry and Financial Markets Association:
Because these debt obligations are backed by the “full faith and credit” of the government, and thus by its ability to raise tax revenues and print currency, U.S. Treasury securities – or “Treasuries” – are generally considered the safest of all investments. They are viewed in the market as having virtually no “credit risk,” meaning that it is highly probable your interest and principal will be paid fully and on time.

Or how about oil? Which the Saudis, for example, can simply print pull out of the ground at will at a cost of a little under $10/barrel?
http://www.zerohedge.com/sites/defau...l%20cost_0.jpg

Or gold? A commodity which is limited in availability, trading at its all-time low relative to U.S. treasury supply and is not only getting harder and more expensive to produce, but which is also catching the eye not only of the central banks of the world’s two largest producers, but of the largest importer and largest exporter of oil?
* * *

COMMENTS FROM BENJAMINIS: The KEY piece of the PUZZLE not yet in place as was explained in this excellent article still is ;

"Now, I hope you’re all still with me because here’s where we get to the final piece of this glorious puzzle—the piece that ties all these seemingly unrelated threads together: China’s own crude oil futures contract, to be priced in Yuan and traded at the Shanghai International Energy Exchange—a yuan contract which will be made fully-convertible:
(Bloomberg, November 5, 2015): By the end of 2015, China, the world’s No. 1 oil importer as of April, may start its own crude futures contract.

The idea is to establish a Chinese rival to the world’s two most traded oil contracts: West Texas Intermediate, housed on the New York Mercantile Exchange, and Brent Crude Futures, owned by ICE Futures Europe in London.

The yuan-based contract will trade on the Shanghai International Energy Exchange and will be among the first Chinese commodity contracts available to foreign investors as China promotes global use of its currency…

Participation will be open to all foreign investors and the yuan will be fully convertible under the contract, according to Song Anping, the chairman of the Shanghai Futures Exchange."

COMMENTS FROMM BENJAMINIS: So now we all know where the World is probably going and the next meeting of the "G20" is in Bonn , Germany starting on February 16, 2017.

It would be appreciated for any readers of this post to like it so I know how many have read what has been shared here today.

Thank You

1

 

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1. https://cdn-assets.faireconomy.media...ar392875_1.gif BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 4,815 Posts | Online Now

The BEST Article on GOLD that I have ever read by a world expert on the subject.

http://bmgbullion.com/gold-vs-gold-miners/

Gold vs Gold Miners
by Nick Barisheff
For thousands of years, gold has been used as money, a store of wealth, fought over and sought after. Over the last 45 years, Western populations have had a mixed impression of gold. A minority of the population understands that gold is a monetary asset that should be held as wealth insurance. A larger percentage of the population is confused about gold because of mainstream sources of information. Many people consider gold a risky investment when in fact gold bullion is not an investment at all, but rather money itself. Just like any fiat currency held in a vault, gold does not pay interest or dividends. Investors often look upon gold mining companies in the same light as physical gold bullion. Gold mining shares are investments, and can be good tactical investments from time to time. However, the characteristics of gold bullion and gold miners are very different. In some ways, those differences are similar to the difference between an insurance policy and shares of an insurance company.
It is important to understand the role of gold as money in relation to fiat currency. Governments and banks work hard to ensure that people retain confidence in their debt-backed paper currencies, and in the economy in general. Wall Street’s message about the economy and the US dollar’s strength has to remain optimistic, because when people are uncertain and skeptical, they do not invest in financial assets, and companies curtail new financings, creating a negative feedback loop. Financing is Wall Street’s lifeblood, so it will always see “green shoots” and “recoveries around the corner,” just as it did in 1929, 2000 and 2008 while the market crashed around it. Consumer spending and bank lending is what keeps the fiat shell game going, and people do not borrow or spend when they feel uncertain about their financial future. Gold, because it inconveniently serves as the truest, irrefutable long-term indicator of the economy’s health, has to be discredited.
There are three essential characteristics of money: it must be a store of value; it must be accepted as a medium of exchange; and it must be a unit of account, meaning that it must be divisible and each unit must be equivalent. Fiat currency has failed as a store of value, and it has no intrinsic worth. How much does it cost to type in zeros on a computer screen or on a piece of paper? Certainly less than it does to dig a mile into the earth to extract and refine two grams of gold from a tonne of rock.
The US Federal Reserve was created in 1913. From its creation through to this day, the US dollar has lost approximately 98.2% of its purchasing power. On the other hand, gold has retained its purchasing power, rising from $20.64 an ounce in 1913 to $1,250 an ounce today. Throughout the ages, whether it be in Roman times, in 1913 or today, one ounce of gold has provided a man with a pair of shoes, a suit and a briefcase, or the equivalent.
http://bmgbullion.com/wp-content/upl...D-1024x614.jpg
A popular misconception about gold and gold miners being similar has to do with the symbiotic relationship between the two. Mining companies have claims to, or outright ownership of, gold that is in the earth. The gold resources need to be extracted, processed and then sold to cover the costs of operations for the company to make a profit. Gold in the ground is very different than a gold coin that can easily be transferred from a seller to a buyer. Mining companies are dependent on the price of bullion in relation to fiat currencies. Specifically, if gold is too low in price, a mining company is unable to extract the gold from the ground, because it is uneconomical. Subsequently the value of the mining company’s shares will trade at lower levels, or the company could go bankrupt. The higher the price of gold, the more economical it becomes to dig for lower-grade sources of gold. Mining shares can move up significantly as gold moves higher, but that is not always the case. Below is a chart of the HUI Gold Miner Index, which contains the top unhedged gold producers in the world, compared to the performance of gold bullion.
While the miners performed well from 2003 to 2007, over the past 20 years the Index shows a loss of 13.9%, whereas gold is up 233%.
http://bmgbullion.com/wp-content/upl...R-1024x638.jpgThe 1970s provide a good example of how gold and gold miners perform during inflationary time periods. In the late 1960s, Lyndon Johnson’s government was escalating the war in Vietnam and increasing government-backed social benefits. This caused the US government to run ever-increasing budget deficits. Prior to 1971, the US dollar, as the world’s reserve currency, was tied to gold bullion at US$35 per ounce of gold. Many countries started to redeem their US-dollar reserves for physical gold bullion. The amount of gold being delivered was unsustainable, and in 1971 Richard Nixon closed the “Gold Window,” eliminating the ability of countries to exchange their US dollars for gold. Inflation spiked as the US increased its sovereign debt load by funding unsustainable government outlays. By 1980, gold had reached US$850 per ounce. Gold adjusted to the changing environment, and increased in price in relation to the faltering US dollar.
http://bmgbullion.com/wp-content/upl...N-1024x629.jpg
It’s interesting to see that gold bullion virtually doubled the return of Homestake Mining Company (the largest gold miner in the world at that time). This is another example of the difference between gold bullion and gold mining shares.
http://bmgbullion.com/wp-content/upl...Homestake-.jpg
From a risk perspective, there are major divergences between physical gold bullion and shares of gold miners.
GOLD MINER RISKS

 

1. Exploration risks – no gold, or not enough gold, will be discovered.
2. Feasibility risks – a company may discover gold, but at current prices it may be uneconomical to mine.
3. Management risks – mining companies face substantial upfront costs and ongoing operating costs, and poor management can destroy an otherwise viable asset.
4. Pricing risks – as gold moves up and down in price, individual companies can experience positive leverage-to-price increases, or go out of business if prices fall too low.
5. Geopolitical risks – governments can become unstable, leading to unreasonable demands, confiscation of assets, and increasing royalty fees.
6. Financing risks – during bear markets, banks often refuse to finance operations and, because the share price of many of these companies is so low, raising equity becomes extremely dilutive to existing shareholders.
7. Environmental risks – mining companies often work in remote areas that are ecologically sensitive. As well, dam and leach pad failures happen from time to time, resulting serious environmental degradation, and possible fines and litigation costs.
8. Stock market volatility – mining shares often correlate with the broad-based equity markets during downturns in the financial markets. Mining shares are extremely volatile and can lack liquidity.
9. Productivity and efficiency – mining companies often face major engineering problems such as cave-ins, mill problems, labour issues, increased energy costs, etc.
10. Hedging policies – mining companies often lock into price agreements that end up destroying shareholder value when major changes in operating costs related to bullion prices occur.
11. Jurisdiction risks – uprisings, war, political upheaval and disasters are all common problems that mining companies face when working around the world.

GOLD BULLION RISKS

1. The risk of losing physical gold is significant if it is not vaulted in a safe location.
2. The value of gold is priced in relation to fiat currencies. Monetary and fiscal policies are a major contributor to the fluctuation in currencies.
3. Supply and demand fundamentals affect the price and availability. We believe that physical gold will soon be unattainable for the average person, because it will be simply too expensive and rare. Mine output is dropping as ore grades are getting lower and lower. Over the last few years’ miners have been processing high-grade resources and leaving low-grade (i.e. uneconomical) resources in the ground.
4. Futures contracts bought and sold by institutions such as central banks, hedge funds and banks can adversely affect the price of gold, because there is more paper gold than physical gold.

PORTFOLIO COMPARISON CHART
The major difference between physical gold bullion and mining stocks is how they react within a properly diversified portfolio. Gold is the most negatively correlated asset class to traditional financial assets such as stocks and bonds. Physical bullion should be a significant part of the strategic long-term allocation within a portfolio, whereas mining stocks should be a small part of a tactical equity component during certain conditions. Multiple studies show that a portion of physical gold held within an investment portfolio improves returns and reduces risk, whereas shares of gold mining companies increase the amount of risk within a portfolio, and can negatively affect returns over the long run.
http://bmgbullion.com/wp-content/upl...S-1024x770.jpg
It is worth noting that gold bullion has appreciated more in price than gold miners over the past 40 years, with much lower volatility.
http://bmgbullion.com/wp-content/upl...R-1024x665.jpg
Owning gold bullion is a form of wealth insurance, and will protect a portfolio during market declines. Mining stocks can provide leveraged upside returns during a rising dollar price in gold, but can exaggerate downside risks during equity market declines, even though the price of bullion may be rising.
http://bmgbullion.com/wp-content/upl...T-1024x393.jpgThere is a growing realization that all is not well in our world today. The popularity of Donald Trump and Bernie Sanders is a direct result of the decline of the US economy and political process. Globally, people are beginning to lose confidence in the system. There are crises brewing all round the world today. Governments, corporations and individuals are all struggling with too much debt. Gold bullion has been trending higher for 15 years, and will continue to do so because monetary and fiscal policies will not fix the structural issues that have been building unsustainably for decades. Debt will continue to grow as government budget deficits continue unabated. Central banks will continue to buy up government debt with currency they have created out of thin air, euphemistically referred to as Quantitative Easing. The value of fiat currencies will continue to erode, because the path we are on is clearly unsustainable. Many gold experts agree that gold will surpass $10,000 per ounce in the coming years.
In summary, mining shares are an investment that can make up a small portion of the overall tactical equity allocation of a sophisticated investor’s portfolio. However, the facts show that gold mining shares are not a prudent long-term strategic investment for most individuals. Physical gold has a long history that spans thousands of years, and it should make up a portion of every person’s assets. The world’s wealthiest people hold bullion to protect their wealth. As Doug Casey, author and institutional investor, says, “The hurricane hit in 2008, we have been sitting in the eye of the storm since the last financial crisis and the full breadth of the storm is beginning to hit us once again.” Globally, the problems we face today are markedly worse than those of the Great Recession. In the coming years, portfolios without physical gold to offset losses in financial assets and currencies will suffer.
To download full article

http://bmg-group.com/wp-content/uplo...old-Miners.pdf