Good morning,
"If you are not getting the desired results, check the assumptions."
Listening to my own advice prompts the following.
I have underestimated the White House policy of a weaker America and the consequential weaker USD. What the US is experiencing is so eerily similar to the Carter years it is as if nothing was learned from that segment of American history.
Peace through weakness and America withdrawing from World leadership results in power vaccum. The weak USD fuels global social unrest as the end result of the weak petrodollar, raises energy costs on those least able to afford higher food costs and depresses weak economies.
Those who can leverage assets benefit from the wealth transfer effect that paying off debt with a devalued currency ensures. Those unable to qualify for leverage, end up working harder to pay for the resulting higher costs of a devaluing currency.
I had reasoned that the US had already reached the bottom of the Barrel, that reasoning on Thursday showed to be incorrect. The Fed once again revealed its religious fervor and unleashed another round of stimulus. Some of it targeted towards housing, but as PT pointed out the bulk of it is to bail out the Banks of toxic assets without incurring any penalty for improper loan making.
Having not thought through the implications of Thursday and getting stopped out of what remained of my initial position being long USD. Friday I took the tactic of scalping short the EURO/USD after the run up above the 1.3100 level This in the attempt to see if it was possible to make money from buying the USD. Small position size was employed. First scalp was a loss. The second when it remained in profit was added to with a short of the AUD/USD and a short of the GBP/USD, by the Friday close all trades were in profit and I went flat for the weekend.
The social unrest that is starting to take root in the Islamic world is founded upon poverty. Poor people turn to religion for they have no where else to seek solace, if some of the religious leadership isolates these people it can have powerful results. The attacks on the embassies across so many Nations reflects how widespread the impact of poverty can become.
Last year there were food riots, this year it has escalated. The weak petrodollar now has Foreign policy implications for the US and the World at large.
The Three pole world is coming to be realized. We have increasing tensions in Asia (current focus is the rising discord between China and Japan) Europe remains Europe centric as the Sovereign debt crisis is far from resolved, The US has for all goods and purposes fallen back to the Time of the Monroe Doctrine which was issued in 1823. from wikepedia "It stated that further efforts by European Nations to colonize land or intefere with states in North or South America would be viewed as acts of aggression requiring US intervention.."
Under the Obama administration the US is now basicaly the regional power in North America, so America has regressed to a time that predates 1823 from a foreign policy perspective. Foreign policy implemented is one of an isolationist outcome as America disengages from the World. Some will dispute the extent of these statements, but what is certain is that taking America out of the World is centerpiece to current White House policy.
The USD is abdicating as the worlds reserve currency and there are consequencies to following that sort of monetary avenue. Bernanke is pursuing policies totaly US centered in origin without any regards to international implications. This can only happen if the White House has established the criteria for where the US is to be in regards to the rest of the World.
For the coming week as it is possible that if in the Islamic world strife intensifies, money flow may shift back towards the USD as a safe haven.
It may also shift back towards Canada even though its manufacturing sector is being hurt by the Loonie strength. Since money flows may get directional this coming week I will continue to sclap long the USD and the Cad against the Euro, but only as an attempt to establishe swing trades at low risk entry levels. If the scalp entry does not get stopped out will not take quick profit but let it run for a possible bigger move.
That for now is the foundation of how I will trade this coming week. I may also continue to trade for deflationary implications of the outlined current geopolitic viewpoint in the commodity crosses.
add: I see that just as I clicked the post button, rekon67 had made a quite appropriate post that just preceeded this one.
Add 2: The upcoming elections in America have very big implications for the USD. Obama re elected, the USD super bears wildest dreams become reality. From Romney will see if nothing else, a stabilized USD. Romney if elected faces formidible challenges to reverse the direction of the prior four years, he can not throw a switch and change gears.
Cameron is starting to gain results as the UK looks to be regaining National pride and with that comes self respect, and the desire for a stronger stable currency. I watch BBC at times and it is refreshing to see the people of the UK happy in their Olympic wins.
"If you are not getting the desired results, check the assumptions."
Listening to my own advice prompts the following.
I have underestimated the White House policy of a weaker America and the consequential weaker USD. What the US is experiencing is so eerily similar to the Carter years it is as if nothing was learned from that segment of American history.
Peace through weakness and America withdrawing from World leadership results in power vaccum. The weak USD fuels global social unrest as the end result of the weak petrodollar, raises energy costs on those least able to afford higher food costs and depresses weak economies.
Those who can leverage assets benefit from the wealth transfer effect that paying off debt with a devalued currency ensures. Those unable to qualify for leverage, end up working harder to pay for the resulting higher costs of a devaluing currency.
I had reasoned that the US had already reached the bottom of the Barrel, that reasoning on Thursday showed to be incorrect. The Fed once again revealed its religious fervor and unleashed another round of stimulus. Some of it targeted towards housing, but as PT pointed out the bulk of it is to bail out the Banks of toxic assets without incurring any penalty for improper loan making.
Having not thought through the implications of Thursday and getting stopped out of what remained of my initial position being long USD. Friday I took the tactic of scalping short the EURO/USD after the run up above the 1.3100 level This in the attempt to see if it was possible to make money from buying the USD. Small position size was employed. First scalp was a loss. The second when it remained in profit was added to with a short of the AUD/USD and a short of the GBP/USD, by the Friday close all trades were in profit and I went flat for the weekend.
The social unrest that is starting to take root in the Islamic world is founded upon poverty. Poor people turn to religion for they have no where else to seek solace, if some of the religious leadership isolates these people it can have powerful results. The attacks on the embassies across so many Nations reflects how widespread the impact of poverty can become.
Last year there were food riots, this year it has escalated. The weak petrodollar now has Foreign policy implications for the US and the World at large.
The Three pole world is coming to be realized. We have increasing tensions in Asia (current focus is the rising discord between China and Japan) Europe remains Europe centric as the Sovereign debt crisis is far from resolved, The US has for all goods and purposes fallen back to the Time of the Monroe Doctrine which was issued in 1823. from wikepedia "It stated that further efforts by European Nations to colonize land or intefere with states in North or South America would be viewed as acts of aggression requiring US intervention.."
Under the Obama administration the US is now basicaly the regional power in North America, so America has regressed to a time that predates 1823 from a foreign policy perspective. Foreign policy implemented is one of an isolationist outcome as America disengages from the World. Some will dispute the extent of these statements, but what is certain is that taking America out of the World is centerpiece to current White House policy.
The USD is abdicating as the worlds reserve currency and there are consequencies to following that sort of monetary avenue. Bernanke is pursuing policies totaly US centered in origin without any regards to international implications. This can only happen if the White House has established the criteria for where the US is to be in regards to the rest of the World.
For the coming week as it is possible that if in the Islamic world strife intensifies, money flow may shift back towards the USD as a safe haven.
It may also shift back towards Canada even though its manufacturing sector is being hurt by the Loonie strength. Since money flows may get directional this coming week I will continue to sclap long the USD and the Cad against the Euro, but only as an attempt to establishe swing trades at low risk entry levels. If the scalp entry does not get stopped out will not take quick profit but let it run for a possible bigger move.
That for now is the foundation of how I will trade this coming week. I may also continue to trade for deflationary implications of the outlined current geopolitic viewpoint in the commodity crosses.
add: I see that just as I clicked the post button, rekon67 had made a quite appropriate post that just preceeded this one.
Add 2: The upcoming elections in America have very big implications for the USD. Obama re elected, the USD super bears wildest dreams become reality. From Romney will see if nothing else, a stabilized USD. Romney if elected faces formidible challenges to reverse the direction of the prior four years, he can not throw a switch and change gears.
Cameron is starting to gain results as the UK looks to be regaining National pride and with that comes self respect, and the desire for a stronger stable currency. I watch BBC at times and it is refreshing to see the people of the UK happy in their Olympic wins.
.
