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Afraid of US government regulations

  • #1
  • First Post: Jul 1, 2011 7:05am Jul 1, 2011 7:05am
I'm considering switching jobs to Forex but the thought of the possibility of govt shutting down the traders is always on the back of my mind. The Dodd/Frank ban of silver and gold restricting leverage didn't help. So my question is, how do American traders who do this as part time or full time deal with this on going threat? Lets say traders from the US are banned to trade Forex, how will the Forex landscape look then?
  • #2
  • Jul 1, 2011 8:55am Jul 1, 2011 8:55am
Quoting chipstopips
I'm considering switching jobs to Forex but the thought of the possibility of govt shutting down the traders is always on the back of my mind. The Dodd/Frank ban of silver and gold restricting leverage didn't help. So my question is, how do American traders who do this as part time or full time deal with this on going threat? Lets say traders from the US are banned to trade Forex, how will the Forex landscape look then?
Trade futures instead of spot forex, if you are afraid that spot forex will end.
  • #3
  • Jul 1, 2011 10:23am Jul 1, 2011 10:23am
Quoting chipstopips
I'm considering switching jobs to Forex but the thought of the possibility of govt shutting down the traders is always on the back of my mind. The Dodd/Frank ban of silver and gold restricting leverage didn't help. So my question is, how do American traders who do this as part time or full time deal with this on going threat?
How do we deal? We just do. A lesser leverage caused me to totally re-evaluate my trading strategy; to look at the market differently. But at the same token, that's just the nature of the market. Nothing is certain, and if you don't have the mindset to take on every change that the market and its nature throws at you, chances are that you'll be one of the 75-90% of people who are donating funds to the big firms.

Quoting chipstopips
Lets say traders from the US are banned to trade Forex, how will the Forex landscape look then?
Easy: EUR/USD futures.
  • #4
  • Jul 1, 2011 10:42am Jul 1, 2011 10:42am
The point is that you know how to trade market.
And if forex is shut down then other markets will be open.
Trading was throughout the human history.
  • #5
  • Jul 1, 2011 11:20am Jul 1, 2011 11:20am
If every thing fails then the last option can be that u flew to some other country...good thing is americans are welcomed every where.
Trade responsiblypatience is the key/Swing trader
  • #6
  • Jul 1, 2011 12:57pm Jul 1, 2011 12:57pm
Quoting Incrediblle
...good thing is americans are welcomed every where.
You've gotta be kidding.

Anyway, if spot forex is shut down for the US there are plenty of other markets. Bottom line is if it has a price that moves you can make money trading it.
You are in a maze of twisty little passages, all alike.
  • #7
  • Jul 1, 2011 1:11pm Jul 1, 2011 1:11pm
Quoting stevegee58
You've gotta be kidding.

Bottom line is if it has a price that moves you can make money trading it.
Very valid point!

I think the only (very remote) risk would come from a Tobin tax implemented on a global basis on all financial transactions. The French/Brits/German are thinking about it but it is pointless if it stays at the regional level.
  • #8
  • Jul 1, 2011 1:21pm Jul 1, 2011 1:21pm
Well until there's a "one world government" there will never be a global tax of any sort.
You are in a maze of twisty little passages, all alike.
  • #9
  • Jul 5, 2011 5:07am Jul 5, 2011 5:07am
I am reading theese posts and think, why not opening a company in another country and trade trough that company.

It it perfectly legal, and you can choose any country you want.

Can this idea solve problem of US-traders?
  • #10
  • Edited 5:47am Jul 5, 2011 5:36am | Edited 5:47am
Quoting hilon
I am reading theese posts and think, why not opening a company in another country and trade trough that company.

It it perfectly legal, and you can choose any country you want.

Can this idea solve problem of US-traders?

Sure you could do this but you add greater risk your bottom line as you have to have a funding bank outside the USA. Alot of these banks don't have any insurance on deposit. Plus you have to maintain this account to bring any profits back to the USA, the brokers won't send it to just any bank account.... this is then a red flag to the IRS.

Next if you stay in USA and do the above you become a target of greater scrutiny by the good ole IRS. You would likely be better off to have a primary residence outside the USA and do your banking in the USA and pay any taxes that you have to pay. [The little guy trader is taken out in this scenario and is the primary motivation of Frank-Dodd rules.... as if you are a "HIGH NET WORTH" individual you can skirt the issue completely as well... you have to provide proof not just say it's so like the good ole days of 2000-2007 (it's all about the MONEY.)

The rules have nothing to do with citizenship only residency... which is why the rules are stupidity with a capital "S".

Buy a home or rent a flat somewhere outside the USA and Frank-Dodd is nothing more than an over-sized book of worthless dribble used for burning. Most brokers only require a utility bill of a residence outside the USA.

The intention is only to shut down the little guy... as we can't have all the worker ants staying at home to trade forex... they need to go to work and service the rich. If not that reason what other reason do they have?

We are trying to protect you from yourself and your own stupidity?

My answer is: You can do this when you have $14 trillion in the bank rather than owe $14 Trillion +plus interest.
  • #11
  • Jul 5, 2011 6:37am Jul 5, 2011 6:37am
Quoting pip_seeker
Sure you could do this but you add greater risk your bottom line as you have to have a funding bank outside the USA. Alot of these banks don't have any insurance on deposit.
This is a huge fallacy perpetuated by the US govt and banking system. The US banking system requires no more than 10% coverage of deposits. In many countries the govt requires much higher coverage. In many of the offshore banking countries, the banks will have 100% coverage through companies like Lloyds.
  • #12
  • Edited 10:50am Jul 5, 2011 6:52am | Edited 10:50am
Quoting Dopey
This is a huge fallacy perpetuated by the US govt and banking system. The US banking system requires no more than 10% coverage of deposits. In many countries the govt requires much higher coverage. In many of the offshore banking countries, the banks will have 100% coverage through companies like Lloyds.

true, you really don't know what the risk is unless the unthinkable happens. I actually saw a people's court episode recently where someone gave someone a $100,000 peso note.

They took it to the bank and the teller did some checking and came back and said it was worth some $1500. So the gal that had an account at the bank gave her "friend" some money and what the "friend" owed her from before was paid with the proceeds.

A few days later the bank calls and says the peso note bill is worth nothing and the $1500 will be taken back out of her account... because the peso note was devalued by the originating country to nothingness.

This has never happened in the USA (currency devaluation to nothing), which is why the dollar is considered a "reserve" currency. [We are only going by history, this isn't to mean the dollar is any safer... we'll see what happens in a couple more months if the US defaults. LOL]

If a foreign bank has a run on deposits they will just close the doors and keep your money... a bank run could happen for many different reasons. When there is no insurance on your money you have no guarantee of anything. Prior to 2008 you really didn't have to think too much about this.
  • #13
  • Jul 5, 2011 9:13am Jul 5, 2011 9:13am
The devaluation of a currency has absolutely nothing to do with the banks. If your $100,000 in the bank is devalued by the govt to $1,000, the bank doesn't owe you any more and insurance is not going to pay either. You're mixing two things. I'm referring to the safety of money in a bank as covered by insurance. Many think that FDIC insurance will cover them when it only covers 10%. So if the bank goes bad, for whatever reason, you'll only get $10k of the $100k, assuming the govt lives up to its obligation.

However, that wasn't the main point. It's the unfounded belief that US banks are safer than the other banks in the world. Sure they're safer than some banks, say in Zimbabwe, but there are plenty of banks in the world that offer more protection in the event the bank goes bad.

This myth was started to prevent Americans from moving their money offshore. The fact that the average American believes that offshore banks are unprotected, while untold amounts of vast wealth are stored in them by people from all over the world, explains exactly why they are average.
  • #14
  • Jul 5, 2011 9:20am Jul 5, 2011 9:20am
Quoting pip_seeker
This has never happened in the USA, which is why the dollar is considered a "reserve" currency. [We are only going by history, this isn't to mean the dollar is any safer... we'll see what happens in a couple more months if the US defaults. LOL]
Actually, we defaulted on our debt twice before. We are the reserve currency not because we haven't defaulted, but because the central bankers used the USD as a sort of currency wedge to price oil in dollars and to create an interdependent financial system that they can take down with one swoop and replace with one large NWO system.
  • #15
  • Jul 5, 2011 9:54am Jul 5, 2011 9:54am
http://travel.state.gov/law/citizens...nship_776.html
  • #16
  • Edited 10:58am Jul 5, 2011 10:36am | Edited 10:58am
Quoting Dopey
The devaluation of a currency has absolutely nothing to do with the banks. If your $100,000 in the bank is devalued by the govt to $1,000, the bank doesn't owe you any more and insurance is not going to pay either. You're mixing two things. I'm referring to the safety of money in a bank as covered by insurance. Many think that FDIC insurance will cover them when it only covers 10%. So if the bank goes bad, for whatever reason, you'll only get $10k of the $100k, assuming the govt lives up to its obligation.

Ok riddle me this: Why does it say on the FDIC plaque in a bank that deposits are guaranteed up to $250,000 per acct.

This is up from $100,000 just a few short years ago.

In 2008 I happened to be at a bank that was taken over by FDIC. I didn't only get 10% of my money. I got the total amount. Back in 2008-2010 it was FDIC Friday nearly every week... funny I don't recall anyone screaming about losing money in their bank because the FDIC only covers 10%.

As far as devaluing currency goes what do you think devaluation would do to a country?

FEAR... people "run" to the bank... pull all their money out and put it in USD under their mattress or whatever. A bank run closes the bank. I believe I already said this in not so many words.



Quoting FDIC
What does FDIC deposit insurance cover?FDIC insurance covers all types of deposits received at an insured bank, including deposits in a checking account, negotiable order of withdrawal (NOW) account, savings account, money market deposit account (MMDA) or time deposit such as a certificate of deposit (CD).
FDIC insurance covers depositors' accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank's closing, up to the insurance limit.
The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if these investments are purchased at an insured bank.
The FDIC does not insure safe deposit boxes or their contents.
The FDIC does not insure U.S. Treasury bills, bonds or notes, but these investments are backed by the full faith and credit of the United States government.
How much insurance coverage does the FDIC provide?The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
LINK
FDIC FAILURES LINK (Picture)
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  • #17
  • Last Post: Jul 5, 2011 10:39am Jul 5, 2011 10:39am
Quoting EmptyEterniT
Actually, we defaulted on our debt twice before. We are the reserve currency not because we haven't defaulted, but because the central bankers used the USD as a sort of currency wedge to price oil in dollars and to create an interdependent financial system that they can take down with one swoop and replace with one large NWO system.
I meant our currency hasn't ever been devalued to equal nothing... although some may argue it has already happened with printing press Ben on the job. LOL
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