EurAnalysis

http://www.ekathimerini.com/4dcgi/_w...02/2012_426433

Tuesday and Benny for a Doubleheader !!!

http://www.forbes.com/sites/charlesk...e-dollar-33/2/

Snippet:

The results of the past 40 years say the opposite.
The Fed’s finger prints in the form of monetary manipulation are all over the dozen financial crises and spikes in unemployment we have experienced since abandoning the gold standard in 1971. The financial crisis of 2008, caused in no small part by the Fed’s efforts to stimulate the economy by keeping interest rates too low for, as it turned out, way too long is but the latest example of the Fed failing to fulfill its mandate to achieve either price stability or full employment.
The Fed’s most recent experience with Quantitative Easing also belies the entire notion that monetary manipulation can spur the economy. Between November 2010 and June 2011, the Fed tried to spur economic growth by purchasing $600 billion in Treasury securities, flooding the banking system with reserves and keeping interest rates low. In response the economy, which had been growing at a 3.4% annual rate, slowed to a 1% annual rate in the first half of 2011. Once, the Fed stopped supplying all of that liquidity, economic growth in the second half of the year accelerated to a 2.3% annual rate.
Second, the Fed does not use real time indicators of the price level. Instead, it views inflation through the rear view mirror of the trailing increases in the PCE. And, even when it had evidence of rising inflation — as it did in the first quarter of last year — it chose to temporize, betting that the spike in inflation would prove temporary.
This spike in inflation did prove temporary, as Fed Chairman Bernanke predicted at the time, but not for the reasons — a slack economy — that he cited. Instead, the growing debt crisis in Europe led to a massive shift in deposits out of the euro and into the dollar — an event totally out of the Fed’s control. Yet, this increase in the demand for dollars was far more important than any action taken by the Fed because it increased the value of the dollar and produced a slowdown in the inflation rate.
What we are left with is a trial and error monetary system that depends on the best judgment of 19 men and women who meet every six weeks around a big table at the Federal Reserve in Washington. At the end of a day and a half of discussions, 11 of them vote on what to do next. The error the members of the FOMC fear most when they vote is deflation. So, they have built in a 2% margin of error.
Given the crudeness of the tools the FOMC uses to set monetary policy, allowing for such a margin of error is no doubt prudent. For example, when the economy slowed in the first half of last year, inflation picked up, accelerating to a 6.1% annual rate during the second quarter. And, when the economic growth accelerated in the second half, inflation slowed. These results are the precise opposite of what the Fed’s playbook says are supposed to happen.

Murray Pollitt's final commentary: Money mountain

http://www.gata.org/themes/gata/imag...ting_small.gifSubmitted by cpowell on 10:18AM ET Monday, February 6, 2012. Section: Daily Dispatches

1:20p ET Monday, February 6, 2012

Dear Friend of GATA and Gold:

GATA has received word of the death yesterday of our friend, Murray H. Pollitt, president of the Toronto brokerage house Pollitt & Co. and longtime advocate of gold's monetary functions. His final market commentary, distributed last week, "Money Mountain," predicting that infinite money creation by central banks would inevitably flow into equities, is posted at GATA's Internet site here:

http://www.gata.org/files/MurrayPollitt-02-03-2012.pdf

Here's Pollitt's biography from the Pollitt & Co. Internet site:
http://pollitt.com/index.php?act=our-people

"Murray H. Pollitt received an engineering degree from the University of Toronto in 1963. He worked as a junior engineer for a couple of years before being introduced to the investment community in 1965 where he started off as a mining analyst for a major Canadian investment dealer.

"Shortly after, he was writing the weekly market letter in addition to his mining research. Murray became a student of the gold market during the latter stages of the Bretton Woods era. He found gold's function as both money and a commodity intriguing, both then and now.

"After five years he left to seek greater 'freedom of expression' and joined a smaller investment dealer where he was an analyst and stockbroker for the next 15 years. Trading gold futures on his own time, he put profits to work for him in Val-d'Or. where he acquired his first gold claims package for himself and friends.

"All of which led to the development, financing, and construction of four Canadian gold mines in which Murray was directly involved. Today two of those mines are operating in good health with over 300 employees.

"In 1984 Murray and two other partners co-founded their own investment firm, which is now known as Pollitt & Co. Inc. As the firm approaches its 25th anniversary, Murray continues to advise clients. He is still an avid writer, respected gold analyst, and president and director of the company."

Pollitt's death is a great loss for our side. Our condolences and gratitude go to his family and friends.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.






I did not know him personally however my good friend did who was then in the Gold mining industry.

In his memory here is an article he wrote about Gold. Rest In Peace Murray Pollitt !!!


http://www.gata.org/files/MurrayPollitt-02-03-2012.pdf


His Last Words In Print...

Murray’s Market Letter – February 3, 2012
best, a dubious measure. Are those ounces
really there? Can you get them? Will the
metallurgy render them uneconomic? Does
management really know how to build a mine?
And, above all, capex is likely to be so large that
the mine is uneconomic. In fact, whether a
pipeline, a tar sands complex or a big mine,
capex projections are now extraordinary. So,
when investing, consider whether the enterprise
has already expended many of the costs to get in
business (sunk costs) or is still at the dreaming
stage. And if we are talking resource
investments, the dream world is all too often a
sinkhole.

It does not follow that a rising tide lifts all boats –
too many have leaks or are just plain
unseaworthy. But with the money mountain
shifting into our kind of investments, we should
have the mother of all bull markets on the
horizon. Remember the old bard: “There is a tide
in the affairs of man…”

The information contained in this report is believed to be reliable, but its accuracy and/or completeness is not guaranteed. All opinions, estimates and other information included in this report constitute our judgement as of the date thereof and are subject to change without notice. Pollitt & Co. Inc. does not issue ratings or price targets on any securities mentioned within this letter, nor does Pollitt & Co. Inc. maintain and publish current financial estimates and recommendations on securities mentioned in this publication. Pollitt & Co. Inc. discontinues coverage of the stocks highlighted in this letter. For information on our policies on research dissemination, please see our website,

www.pollitt.com.

http://financeandeconomics.org/Artic...%20fallacy.htm

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The fallacy of economic growth
The most important objective for any government is to achieve economic growth. Out of this growth develops employment and taxes to fund government itself. It is in other words the primary focus of all economic planning. Much effort is also spent perfecting the statistics deemed vital to quantifying everything that might contribute to the attainment of this end. Furthermore, “independent” monetary policy long ago migrated from the principal objective of controlling inflation to stimulating the economy into more growth. Almost everyone in developed economies knows and supports this objective, even if they argue over the means. However, not only have governments consistently failed to achieve this fundamental objective, they are now increasingly worried that government spending cuts will propel us all into a deep economic contraction.

But are we right to think in terms of economic growth or contraction? The concept is essentially Keynesian and stems from mainstream economic analysis. It presupposes that governments actually have a positive interventionist role and can improve economic outcomes, a supposition that is on examination completely flawed. Instead, an economy that successfully delivers the products and services people actually want does so in an unplanned, random fashion. It is the sum of all activity, which organises the production of goods and services by entrepreneurs and business proprietors in the considered belief they will be wanted.

The strength behind a free-market economy is the randomness of productive actions, and progress of mankind’s condition is the result. It only expands if the factors of production expand; otherwise the distribution of available resources depends on entrepreneurial anticipation of people’s needs and wants. When government intervenes in this unplanned but productive chaos it destroys this random quality, harnessing economic actions into in a common direction.

Destructive cycles of boom and bust have always been the result. Governments seek to co-ordinate randomness for an outcome they commonly call growth, and for a short time they might appear to succeed. But it is not long before these co-ordinated economic actions inevitably drive up prices, because extra factors of production (raw materials, labour and capital goods) only become available at higher price levels. Higher prices inevitably lead to higher interest rates, to the point where those who have fallen for the bait of artificially cheapened credit have to cut and take their losses. Capital theory predicts this outcome, events always confirm it, yet mainstream economists continually ignore it[i].

Intervention is as likely to succeed as water is to run uphill. Economic growth or the lack of it, the success or failure by which it is measured, is its child. The question then arises as to whether or not we can have economic growth without intervention.

The logical answer is no. A free-market economy in the absence of external factors does not grow: it progresses, which is a very different thing. It discards those things consumers do not want and produces things they are likely to want. It adjusts the price of products to a level which satisfies the consumer and is at the same time profitable. Overproduction is punished and underproduction invites competition. No one knows what the consumers will buy tomorrow or how much they are prepared to pay, but randomly-acting entrepreneurs are generally pretty good at guessing, because they put their own time and money on the line. They have to anticipate levels of demand and also prices for their output for at least as far in advance as it takes to plan, produce and market any product. This is progress, not growth. Progress is about better products and services tomorrow than today, using the resources actually available. Progress is about better value for money tomorrow, which means that prices tend to fall. And as prices tend to fall, more things can be bought for the same money. What governments do instead is destroy this process of progression in an attempt to replace it with statistical growth.

The statistics devised to measure it, principally gross domestic product, cannot measure anything other than the money in the productive economy, which it does imperfectly. Government spending, which is an economic cost, is included pari-passu with valued production. Efficient producers such as the manufacturers and suppliers of electronic goods and services, who reduce their prices over time, see their output diminished as a proportion of the statistical whole, while those that maintain their prices by monopolistic or subsidised means keep and even increase their weightings. This is simply the result of the indiscriminate use of a money-aggregate to measure the fallacious concept of economic growth. So GDP and related statistics do not measure progress: if anything they promote economic regression.

Instead, we must conclude that GDP is an approximation of the amount of money deployed in an economy. It is equal to a combination of measured production, government spending and price changes. Let us assume for a moment that extra factors of production at a given price level are not available, so production only progresses depending on how existing factors of production are redeployed. Let us further assume government spending and regulation of the private sector is also unchanged. These two conditions being the case, economic growth must be a reflection of price changes, which in turn is the result of changes in the quantity of money deployed in the economy. And in recording “real” economic growth, that is economic growth adjusted by a price-inflation index, statisticians avoid recording most of the effects of monetary inflation. Therefore, economic growth is not growth at all: it is just an alternative and flawed measure of unreported monetary inflation.

We would not take the central planners’ flawed attempts to manipulate an economy and the statistical outcomes seriously were it not for the ultimate consequences. Not only have they completely deceived the public over economic growth, but they deceive themselves. For this reason they are unequipped to deal with the developing crises, which are the result of earlier interventions. They now claim that economic growth, the ultimate source of tax revenue and government solvency is jeopardised by spending cuts. Statistically, this is obviously true, because if you take away government costs and support for unwanted economic activities, GDP will fall. But the important point that is commonly missed is that a government which stops draining an economy of its private sector resources actually releases them to be deployed more effectively for the common benefit by those randomly-acting entrepreneurs.

And that, ultimately, is the way out of all economic difficulties.
Alasdair Macleod 6 February 2012

http://www.marketwatch.com/investing/index/dxy

How to Break Your Cycle of Losing Forex Trades


http://cdn1.ltttmstatic.com/wp-conte...sed-trader.jpgThe primary goal for any trader is to maximize winning trades and also to have as many winning trades as possible. However, where most traders go wrong is thinking that EVERY trade will be a winner and then becoming emotional when they hit an inevitable loser. Since most traders do not know how to lose properly, they typically experience a string of consecutive losing trades that significantly drains their trading account. It is these large series of losing trades or the ‘cycle’ of losing trades that we need to learn how to break, and in today’s trading lesson I am going to give you some concrete tips to help you avoid experiencing a large series of emotionally-induced losing trades…

Every trader has losing trades; in fact we can even say ‘losing is part of winning’ as a Forex trader. Whilst losing trades are indeed a part of trading that we cannot avoid, it is important to learn HOW to lose effectively. This is not a topic that is discussed very often since it is not exactly ‘hot’ or ‘catchy’, but I can assure you that until you know the correct way to lose a trade you will never become a long-term winning trader.

What does losing ‘properly’ mean?
In the opening paragraph I eluded to ‘losing properly’. You may have thought this sounded a little bit weird if you aren’t a very experienced trader or if you are still in denial of the reality of what it takes to become a successful trader. So, I want to explain what I mean by ‘losing properly’…

Basically, losing properly means accepting a losing trade and NOT BECOMING EMOTIONAL. How many times have you had a trade turn into a loser that you thought was the ‘perfect’ setup that just could not fail? It is these situations that give most traders trouble and cause them to become emotional after a loss. You have probably experienced a large string of losing trades after a trade setup that you thought was ‘perfect’ failed to work out how you thought.

A truth of trading is that no one ever knows and can never know what is going to happen in the markets with 100% accuracy, at least us small-time retail traders that is. So, if you believe this fact and accept it, you should always be consciously aware of the fact that every time you enter a trade you COULD lose the money you put on the line. Even if you are a master price action trader and your yearly success rate for your price action setups is say 80%, that still means you are going to lose 20% of the time, and the key here is that you never know WHICH trade will lose and which will win, so you HAVE TO practice proper Forex money management on EVERY TRADE you take.

The point here is that if you fully accept that you could lose on any given trade and you manage your risk properly as a result, you should largely eliminate any potential for becoming emotional after a losing trade and this is the key to both breaking a cycle of emotionally-induced losing trades as well as helping you avoid large strings of emotionally-induced losing trades.

How do you lose ‘properly’?
http://cdn1.ltttmstatic.com/wp-conte.../win-loss2.jpg(Note: there are emotion-induced losing streaks and ‘natural’ losing streaks, some losing streaks are just a natural part of trading that we have to deal with by controlling our risk on every trade, but the losing streaks fueled by emotion are preventable and these are what I am talking about in this article)

Now that I’ve explained what losing properly means, and that you have to eliminate emotion after a losing trade in order to break an emotionally-induced cycle of losing trades (or avoid one), I want to give you some pointers on exactly how to eliminate emotion after a losing trade:

• STOP TRADING
It can be difficult to ‘wake up’ when you are in the middle of an emotion-fueled account-blow out, but if you can manage to take off the blinders for a minute and realize that you are out of control, the best thing to do is to simply stop trading, at least with real money. There’s nothing wrong with going back to demo trading to regroup or simply taking some time off from the markets all together. Indeed, if you are in the middle of an emotion-fueled losing cycle, it is unlikely that you can ‘trade your way out of it’, so instead accept the reality, take your losses, and regroup.

• START LEARNING
If you are experiencing cycles of emotion-induced losing trades and large strings of losers, you probably have some learning to do. Go and read some of my other Forex trading articles that cover topics like trader psychology and money management, these are likely to be of great benefit to you while you take some time off from the markets to regroup.

• RISK MANAGEMENT
Perhaps the most important aspect to losing properly and avoiding large strings of losing trades is simply to manage your risk effectively as you trade. Many traders email me looking for concrete rules to risk management, but in reality there are none because every trader’s financial situation is different. The dollar amount that you risk per trade is very important to your overall emotional state as you trade the markets. If you risk an amount that causes you to think about your trade all the time and lose sleep over it, you are obviously risking too much. My general rule of thumb is to always risk an amount that allows me to totally forget about the trade. If you are 100% OK with losing the money you have risked on a trade you will not lose any sleep over your trades and you will not become emotional after a losing trade. This is the KEY component to breaking cycles of losing trades and avoiding them in the first place.

• PATIENCE / DISCIPLINE
If you can manage to not jump back into the markets after a losing trade only because you want ‘revenge’ and to try and make back your lost money, you will largely avoid cycles of losing trades. When you trade with discipline you are able to employ the patience that you need to only take obvious price action setups and this allows you to avoid many less-obvious / low-probability trade setups. Ending your cycle of losing trades is all about recognizing the things that make you emotional in the market and then eliminating them. However, the trick to this is that you need to possess the self-discipline to actually not do the things you know you are currently doing wrong. Discipline in any area of life takes conscious effort, whether it’s going to the gym 4 days a week or trading the markets, if you want to reap the long-term benefits you have to put yourself out of your comfort zone for a while. Changing your habits in any area of life is often not comfortable at first; it is only after we go through some mild discomfort via employing discipline that we see our efforts pay off.

• DEMO TRADE
Demo trading is a tool you can use to stop a cycle of emotion-induced losing trades. When you feel like you are out of control in the markets and you know you are ‘running and gunning’ instead of trading like a sniper, try going back to a demo account to eliminate the emotions and regroup. This is probably the easiest way you can stop a cycle of losing trades because you still get to participate in the markets but you don’t have to risk losing any more money.

• BECOME A FOCUSED SNIPER WHEN YOU RETURN TO THE MARKETS
http://cdn1.ltttmstatic.com/wp-conte...-a-sniper1.pngWhile you are taking some time off from real-money trading to help break your cycle of losing trades, it’s a good idea to train yourself up on an effective trading strategy like price action trading. Trading is largely a game of trial and error; most traders need to learn the lessons of over-trading, over-leveraging, and not having a mastered trading strategy the hard way, that is by losing a lot of time and money. So, make sure you learn something before you try your hand at real-money trading again. Take the time to truly master whatever trading strategy you are interested in, until you are consistently profitable on a demo account. Then, when you have everything in-line, including 100% confidence in your ability to trade your strategy, a well though-out Forex trading plan and a trading journal to track your progress, come back to the markets and try your hand at real-money trading again.

http://www.learntotradethemarket.com...IiA1YE8W1XwtMW

Welcome Aboard...

Nice to see you here... NLP !!!

http://www.nlpu.com/NewDesign/NLPU_WhatIsNLP.html

http://www.gata.org/files/QBAMCOAnAd...t1-02-2012.pdf

Snippet:

Whether or not Greece will meet its debt obligations in March and beyond has little to do with Greek wherewithal and output. Everyone knows Greece is insolvent and cannot meet its March 20 payment. Nevertheless, bets are being made quite aggressively in the capital markets handicapping sovereign bailouts. As it stands today the debate surrounds how much to haircut Greek debt and through which entities the bailout would pass.

Were Greece the only insolvent sovereign then most would think it would have already been bailed out. But the dubious balance sheets of other sovereigns like Portugal and Ireland (and Italy and Spain) demand that both sides, creditors holding Greek debt and solvent sovereigns like Germany ostensibly on the hook to pay them, try to find acceptable terms. The parties involved are not only negotiating about Greek debt.

They are no doubt posturing for future negotiations as well. Many if not most Greek creditors, (and certainly the most active investors in negotiations), bought their bonds and CDS in the secondary market in anticipation of this workout. Both sides are concerned with establishing precedent. Whatever discount-to-par creditors take on the March 20 sovereign Greek debt payment would establish benchmark terms for other struggling Euro sovereigns as well.

Thus, it is possible that the valuation of sovereign debt across all Euro nations will be established in relatively short order. This would conceivably indicate how much new currency the ECB would have to manufacture, which in turn would allow a more knowable valuation of the Euro vis-à-vis other major currencies. Perhaps this is why all those EURUSD shorts we keep hearing about have not succeeded in taking the Euro down? (And it still amazes us that media still do not understand that for every seller there is a buyer. Maybe they should learn to report which side, buyers or sellers, is most vociferous or has the shortest time horizon?) Nevertheless, we think ongoing currency exchange rates have been more or less accurately discounting the outcome and timing of the Greek debt workout, which in turn would establish a benchmark for sovereign debt haircuts across the Eurozone.

Good Evening... You can post now. I am ALL POSTED OUT... Smile...

http://www.financialsense.com/contri...ees-his-shadow

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February 2012 finds the world in its own timeloop as we remain trapped in our very own Groundhog Day watching politicians try endless new and inventive ways to ‘fix’ a simple problem of way, WAY too much debt. It isn’t complicated. The world grew fat and happy on the sugar rush provided by a decades-long injection of cheap and easy credit and now it’s time for the crash diet. Trying to avoid the ‘crash’ seems to be uppermost in everybody’s mind.
Interesingly enough, the Fed’s very own Groundhog Bailabankout Ben testified before the House Committee on the Budget on February 2nd and, having been dragged from his burrow into the day-light, Ben saw all kinds of shadows:

While conditions have certainly improved over [the last two and a half years], the pace of the recovery has been frustratingly slow, partcularly from the perspective of the millions of workers who remain unemployed or underemployed. Moreover, the sluggish expansion has led the economy vulnerable to shocks...

The [COLOR=blue !important][COLOR=blue !important]outlook[/color][/color] remains uncertain, however, and close monitoring of economic developments will remain necessary...

http://www.ekathimerini.com/4dcgi/_w...02/2012_426430

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Merkel, Sarkozy propose separate account for bailout money




http://sup.kathimerini.gr/kath/engs/...ogerma_390.jpg http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif French President Nicolas Sarkozy (left) greets German Chancellor Angela Merkel (right) upon her arrival for a Franco-German cabinet meeting at the Elysee Palace in Paris on Monday, February 6.</B> http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif
Only a few days after controversial German proposals to install a budget commissioner in Greece, French President Nicolas Sarkozy and German Chancellor Angela Merkel suggested on Monday that if Greece secures a new bailout, the money it receives should be paid into a special account from which bondholders will be paid directly.
The scheme proposed by the two leaders following talks in Paris echoes an earlier German suggestion for Greece to only be allowed access to the bailout money if it has first paid off its debts.

“I support, as the French president has, the idea that the necessary interest payments for the debt be paid into a separate account to make sure that Greece then consistently makes this money available,” Merkel said.

An unnamed French source told Reuters the idea was for funds from a planned second 130-billion-euro bailout program to be siphoned off to reassure bondholders that future payments were guaranteed.
The proposal was made amid growing pressure on Greece to conclude talks with the troika and sign up to further reforms and austerity measures.

...now?... lol!! Seriously, you are better than the news!

I was wondering if anyone here trades cross pairs....I have been trading EUR/CAD for several months now and find it far easier to trade as compared to EUR/USD....the reason being if there is a short signal on EUR/USD ....before selling EUR it might be interesting to see how USD/CAD is behaving....CAD is far less susceptible to external news than USD in this kind of an economy

Good morning all. As I am sure you are all aware, the situation in G-Spot is still unresolved. However, it seems that we still get the occasional short covering. There is talk of big names playing the current 200 pip range in the mean time and there are supposedly massive stops piling up in both directions just outside the range. As such, on a break of either side, it should go parabolic.

So far the new falling channel is being respected.
The rising channel started in mid January was broken to the downside yesterday early during the Asian session and so far price has not managed to re-enter the channel but it seems to be hugging the underside of the LTL support.

I am neutral in position right now. For obvious reasons my bias is more to the downside but I'm hesitant to do anything until we get a clear break and H4 close below 1.3025

trade safe all.

H4 Chart...

Cath, Kno IS the news

Oh my god - Kno used G-word in his news reviews....!!!!

You are quite right Sanquir.
Canada does not have any political problems or a central bank determined to devalue the currency. The fiscal and monetary policies of Canada are conservative and stable... (unlike the US and EZ)

Pretty much the CAD moves with basic economic fundamentals and is mostly affected by the price of crude oil.

So, usually when the EUR/CAD makes any major moves either way, if oil is not moving, then it's the EUR that is causing the move... Same with USD/CAD, if it's not oil, then it's the USD. Very rarely does the CAD make any moves itself. Probably the most stable currency in the world.

Yeah I noticed that

SP500 is starting to look a bit over extended to the upside. A correction is now due.

As you see from the SP500 daily chart depicted below, price has reached the 88.6% fibo level (1342) of the last move from the May 2011 high of 1376 to the October 2011 low of 1074

According to the PT theorem, when price reaches the 88.6% fibo level of a retrace or reversal, price is very likely to retreat back to the 38.2% fibo level before making its next move. The 38.2% fibo level is located at 1190. It does seem unlikely that the SP500 will fall back down to the 1190 level but it shoud at least make a significant correction down to the last major resistance break out around 1275 (yellow dashed horizontal line)

As such, if this correction takes place, obviously the Euro will be dragged down with it. If technicals were leading indicators of what is about to happen (which they are not.. at least not absolutely), then it would be safe to assume that G-Spot is not going to fare very well in their negotiations with IIF and Troika.

Time will tell.

oh my god... I go away for a few days and this turns into the No SL thread (minus the name calling)...

People who are confused about the issue of world order (new or otherwise) need to read a bit of history. They also need to read a bit on current events. World order is one of the most important issues of our time. It is also one of the most important issues for our species and our world.

The old world order was the the law of the jungle. Nations were expected to behave badly and they did most of the time. The current world order one where nations are expected well and they do so some of the time. If you are a trend trader (as I am) then the new world order should be one where nations behave well more of the time.

For the record, I believe the world is a great place and it is getting better quickly by any standard we know. I love my countries (plural), I love the world and I think the future is both bright and interesting.