EurAnalysis

Your new theme song..... Quite fitting for a bear

I must say that the initial screen shot (crotch shot of a guy in red tights) is not the most enticing start...

i thought that was a girl...

*dissapointed*

Lots has been said on the beneficial effect of using inflation to melt away national debt.

Not so much (but some) has been said on the key danger of using inflation. Hyperinflation is not the key danger-- it is excessive interest payments. If inflation rises to 10%, interest will rise to 12%. So in exchange for a 10% reduction in debt you will get a 400% (from 3% to 12%) increase in the cost of borrowing. Paying 12% on 14T of debt is about 1.5T or the majority of the US national budget.

I have yet to see anything about how to solve the danger of inflation. I would like to put forward my idea on how is can be done and in fact is already in process of being done.

First you need to secure the national debt in long term bonds or with lenders that will allow you to roll over your debt like a central bank. This is exactly what both the FED and the ECB have been doing for the past year. Second, you need to reduce government spending so that new debt purchased at much higher prices will not destroy the benefits that inflation bring. This is exactly what the EZ is doing and exactly what the US is trying to do and is failing at.

This two step process allows you to enjoy the benefits of inflation without suffering too much from the downside.

Any thoughts?

Good morning Europe,

I am off to work and am posting chart so I can see my levels at work and ofc so you can have a look as S/R if you like to.

Good luck this week,

Tom

3550s await for my sweet spot to short.

as i said, inching a slow progressing bull trend.

expect boucne about 20 pips from now shouldnt be the bulk of the horde of bears yet.

Well the fundamentals that drive the market are still pointing down but the interventions of late (coordinated CB action and hopium injection by the Muppets) are creating bullish sentiment... at least for this week and possibly into next weekend. So let's see if the technicals support this.

As you all know, I have been calling for a significant correction of the big move down ever since price reached down to the 1.3420 area two weeks ago. Still price hit an even lower low of 1.3208 last week which made a significant upward correction even more likely. So late last week we started flirting with 1.35 and managed to spike to a high of 1.3545 but still remained below 1.35 on a daily close basis. As such I don't believe we have yet had that significant correction. My sights are more set on the 1.3605/50 area at a minimum which coincides with the 55 Day moving average lines (Thick and thin red lines on chart). However, with enough hopium, we could reach the full technical correction level of the 1.3825 area. Unlikely in my view but not impossible. You see that is where the 38.2% fib of the move up from October's 1.3145 low to October's high of 1.4245 As I have mentioned many times in the past, my intensive studies of fibo retrace behaviors have shown me that more often than not, when price reaches the 88.6% retrace level, it turns back and heads towards and often reaches the 38.2% level before again turning around to go back towards and beyond the 88.6% and 100% levels.

So in summation, here is the technical probability.
1. From here, price moves back up to between 1.3605 and 1.3825
2. Price then moves down towards and past November's low of 1.3208 and eventually on to 1.2884 before the next upward correction. The only question now is timing, but one thing is for sure... this week will be whippy.

Trade safe everyone.

Buma,

You must be the king of posting on FF. Over 6000 posts and a membership that started in August.

cant keep my fingers still can i ?



"i post useful things...."

The effect of hyperinflation

One coffee please

China likely to cut reserve ratio further according to Fitch

The effects of deflation...

One chalet and 10 Ferarris please....

Don't we wish?

And if you don't have change, throw in a small Lichtenstein, please. ))

If Europe inflates and the US deflates we can get the best of both worlds... particularly if we short the Euro...

Considering my secondary income is in Canadian and US Dollars, I will not complain.

I understand there are a few second hand ones available right now in Japan at a good price.....

Nice summary PT. Ahh, that would be lovely if we reached ,38. I would bet my account in such an occaison . Well seriously, I would be considering like 5% risk if we get there.

T

Don't forget the joys of scalping at that level. In a perfect world it will range at that level for a week or two... a big nasty 200 pip range for the 5th time this year...

I am already prepared to scalp some. I build long term shorts like a scalper anyway, so why not grab some pips in the meanwhile huh? I am ready for several levels. Righ now I am eyeballing 3538, 3581, and, If I am lucky 366 - 368 for heavy shorts. Maybe I will consider 3495. Maybe.

edit: regarding perfect world. Ah, this 200 pips range would be great. Poor me unable to go long.

T