EURUSD

If no new high/close will be made with ongoing 4h candle, i can tell you, it's bad news for bulls.

first 50% closed

I have closed out this long at 1.4542, as price is indicating a downward move. And I don't want to loose profit already made from it.

http://www.asianinvestor.net

Krugman got it wrong in September, says Faber
By Joseph Marsh | 8 December 2009

US Federal Reserve officials also seem to miss the fact that excessive credit growth and leverage have driven monetary and economic instability, says Marc Faber.

"Recently Paul Krugman wrote a 6,000-word article in the New York Times with the title 'How did economists get it so wrong?'. The title should have been 'How did I, Paul Krugman, get it so wrong?'." So says famed bear Marc Faber, also known as Dr Doom, at AsianInvestor's recent Southeast Asian Institutional Investor Forum in Bangkok last week.

The point Faber was making about the article published on September 9 by Nobel Prize-winning economist Krugman was that there "was not a single sentence about excessive credit growth or excessive leverage leading to monetary and economic instability".

Faber levels a similar accusation against the current chairman of the US Federal Reserve. "Ben Bernanke is a great expert on the Great Depression in 1929-1932," says Faber, "but he was not paying attention to the years of excessive credit growth leading up to it in the 1920s."

Whereas in 1929, global credit represented 186% of the global economy, he adds, that figure now stands at 375%. And that 375% does not even account for future liabilities that will arise from Medicare, Medicaid and Social Security, which are estimated in the US at between $59 and $110 trillion. "If those are included," says Faber, "we would have a total credit to GDP [ratio] of around 600%."

With this level of debt, the US can forget about tightening monetary policy and will go on printing money, with obvious implications for asset markets -- a point similar to the one Faber made at AsianInvestor's Korea Investment Forum in mid-2009.

"It's important to understand the philosophy of the Federal Reserve, which has structured its monetary policy around core inflation," Faber dryly notes. "That excludes energy and food, so as far as I'm concerned that doesn't apply to you [everyone in the audience], because you all eat, and you all fly and use air conditioners."

Making reference to how US expansionary monetary policies, with "artificially low interest rates", have created "the credit bubble, the housing boom, the refinancing boom and the other problems we have today", Faber argues that such policies have been highly destabilising for economic growth and for asset markets.

One of the examples he cites is that of commodity prices: "Had the Fed not slashed interest rates so dramatically after September 2007, we wouldn't have had the CRB [Commodity Index] going ballistic, and in particular oil prices [which rose steadily from around $75 a barrel in May 2006 to $147/bbl by July 2008, before plummeting to close to $30/bbl in the space of six months."

"The easy monetary policies have had a decided impact, because of higher costs for consumers and businesses due to higher oil prices," Faber says. "This crisis has not solved anything; we have less transparency than before."

Indeed, Faber envisages another, much larger crisis, in which not only does the banking system go bust, but several governments are unable to pay their obligations.

What can the FOMC bring today? Let's see:

1) No changes to rate or statement: Slightly bullish for E/U. Some shorts will close who were hoping for a more bullish statement.

2) No change to rate, but less dovish statement: Resume down move, E/U uptrend most likely over.

These are the 2 most likely outcomes, with #1 being the most likely. Any other possible outcomes would involve changing the rate or an outright bullish statement. These are very unlikely---but if they happend, well, then 'let there be blood'. Mr. Margin would be calling for many traders.

I don't see how the statement could give a big lift to E/U... Fed can't cut rates anymore and their previous statment is about as dovish as it can get. That being said, Mr. Bernanke has proven several times that he can and will kick the crap out of the dollar. We never know what Uncle Ben has up his sleeve! Good luck and trades to all!!

Dec 15th's 3 hour bar closing at 10:00 gmt showed a further downward move, and PA now looks that it will go with it. I am therefore only looking for short entries from now on. I may change my mind in an hour or so, who knows!!

A few pieces of personal analysis from me here:
- I know this thread might not be the place, but look for a rounded bottom on the 4H Gold. If confirmed (by 1-2 more dips) it may result in a really explosive rally.
- The Euro is finally doing it's correction. In my analysis, medium term it may drop to possibly 1.42(that's the lowest possible level I see). After that 1.60 looks almost imminent. So my guess is we'll see the euro drop a bit more around the holidays(just before the markets close for holiday and shortly after they reopen), then when 2010 kicks in we'll resume rising. Technical explanation here. Both symmetrical triangle and double bottom give a target of about 1.6 which is not yet reached. This shows there's a clear potential for the uptrend to resume. Ofcourse, a confirmation is still required to show that a real downtrend isn't starting

just a matter of time to reach 1.4610/20 or even higher...

nothing special with today fomc

" Lower consumer inflation dents Fed rate hike expectations and takes USD lower here "

Payday coming 1.4730 (conservative short term target)

Main point is FEDs DON'T need strong dollar. Period.

If you want to talk about leverage lets talk about Europe. Banks like Deutsche Bank geared up 50:1 and others too.

Ever since the Euro was formed inflation has been running rampant worldwide,
Euro started as paper currency with massive deficits therefore will not surivie as long as some other currencies.

eyes on
USDCHF 10361

Yes, the E/U trade right now is really about "who sucks less", as both USA and Euroland have serious problems (understatment!).

Euro was formed to make Europe look like emerging market. There will probably have to be a serious crisis for Europe to learn.

You are again proving to be right in your research and analysis.

Still some time is left before dollar bears take the charge completely, but you were saying this same thing that by wed, we will see first signs of dollar bears.

I have followed your every post and when every one was saying it is a trend change, you were confident that it is a mere correction.

Keep up the good work.

Wow, I was out most of the afternoon yesterday and just getting back to charts now. Had my stop loss on my longs at 1.4502 and it came as low as 1.45036 on my broker. I'm not used to that. Usually it trades through my stop loss by about one pip and then reverses, not trades just above it and reverse.

That a Strong SELL.

I already push that trigger before 8:30

I agree with your 1) and 2) with the note that for me "dovish statement" means if they will accentuate good unemployment datas.

Thank you very much. You know I like technical too, but mixed with

Logic at least. When Guy posting Silver chart and Saying that Price

going $8.50/oz because his wave analysis say so? Or OIL to $40 now, when recession is almost

over??? Please.. That happens when people read too much propaganda and brainwash on Bloomberg and CNBC.

Dollar rise to 1.25 only because Market crashed plus massive deleveraging


and Deflation. If you see DOW back below 6000, then yes, Dollar my rise

to 1.30-1.35. Simple enough.

So broken daily (up)trend line and current correction of 500 drop is already up trend.

ok, ok

this trend is breaking you didn't see it over past 2 weeks. did you stop lying to people.

People talk about there being too many dollar bulls, but none of you are bullish on dollar so where do you see these dollar bulls.

Didn't your country go bankrupt when oil hit 9 dollars a barrel in 1998.

Government should lower tax on oil. The the actual price of oil would have greater impact worldwide.
Oil has averaged 37 dollars over last 3-4 decades why should it trade at 70 now. I want to see a few countries go bankrupt.