EurAnalysis

Welcome back, Bro

Comment on tonites US Presidential debate.
Was pleasantly suprised, it had some substance. Unmentionable issues were front and center, Role of government, Growth of the economy, Deficits, Military expenditures, Bipartisanship to break the stalemate,
Healthcare costs.
A tip of the hat to Gofer Pips about looking for what was left out, Education was the only Social issue aired whereas all the other stuff was not touched.

To publicaly air that it is not all a free ride, one can only live in hope that the USS United States is going to correct course no matter who gets elected. The Debate was primarily about economic issues and that sets the tone for the election campaign. So this election is about the economy.

From a fundamental viewpoint positive. USDX ranging but in the top of recent range.

Some supply came in 1.2930 area if it continues the 1.2940 area is firming as resistance.

Draghi tommorrow, he will be supportive of the ongoing Euro reconciliation process, but no way will he talk up the Euro for a stronger exchange rate. He is well aware of how close to the edge the future is for the single currency. He will not talk it down either, not wishing to scare off the bond market, so sideways continuation is favored.

It is possible that due to the debate the market may be a bit more favorable to the USD on Thursday, but we have to have NFP before any real move will commence.



.

Certainly, as of now people have accepted some positive data from the US. However, some people have worries on recent fiscal cliff issue. In fact, a new report from the nonpartisan Tax Policy Center found that everyday families will see main tax hikes in the coming year, should previously enacted tax breaks expire without renewal. Probably, it would be the result if lawmakers will continue to neglect talking about "fiscal ledge. Hence, the Fiscal cliff will raise taxes of about 90 percent of Americans.

few shorts @1.2929

http://www.jsmineset.com/wp-content/...002_thumb2.jpg


Mr. Sinclair,
Of course we both know inflation doesn’t exist in the broader market because it shall be deemed to be non-existent. I just planted 90 acres of wheat and when calculating the number of seed bags necessary, I was short. Wheat has always been sold in 55lb bags as you know. This year the bags are 50 lbs, but at least the price did not increase! Hey what’s a 10% haircut between friends.

I guess the MOPE spin on this is there is no inflation, there is simply a deflation of volume! If it weren’t so tragic it would be funny.

Come to think of it, this would be a great diet plan – simply lose weight by changing the volume. "Look honey you lost 10 lbs this week with our newly calibrated scale, great job! Just think how thin you’ll be when a pound weighs 32 ounces."
Cheers,
CIGA John H


Dear Jim,
My wife and I are in our seventies and thank you for all you do for us.
I am confused on interest rates. If the Fed. is buying our debt from the treasury to keep the interest rate down what has to happen for interest rates to rise? Since the Fed. cannot be audited, how do you know when they cannot add anymore to their balance sheet?
Thank you,
CIGA Vince and Diane

Dear Vince and Diane,
You cannot fight the Fed as the Fed has an open check book with overdraw to infinity.

They could add to their balance sheet to infinity, only controlled by the impact on the dollar of a clearly bankrupt central bank in time.

The Fed balance sheet will in time get so top heavy, hurting the dollar and then rising rates. As long as QE to infinity is in business, rates are not going much higher, if at all.
Jim


Dear Jim,
Having discussed US government bonds with you previously, and you making the case that the Fed will successfully keep the bond market from popping via uneconomic buying, I have done some thinking as to what the future of rates might look like which I would like to run by you. I have given in on the fact that the Fed, with technically infinite liquidity, can in fact keep the US government bond market from blowing up. What I have been thinking however is that this will likely not mean low borrowing rates from banks. In the process of inflating everything to keep the financial system from imploding while monetizing the government’s debt away they will create the inflation that will insure high borrowing rates. The banks will borrow very cheaply from the Fed and then continue to demand wider and wider spreads between their lending and borrowing rates to ensure inflation doesn’t eat their loan book alive. In fact, I would suspect lending would get very tight in such an environment as banks, not being stupid, would rather accumulate assets that will explode in value, leading banks to require an excessive interest rate to induce them to lend at all. This is the same as saying the debt will erode in value very quickly if they were to lend and will require a risk premium on rates to account for this, especially as inflation really takes off and uncertainty about tomorrows prices of everything runs rampant. This would lead to a widening spread between government yields and corporate and consumer debt yields. It would be a win-win for the banks. On the one hand they could borrow cheaply and sell their garbage US T-Notes and Bonds to the Fed at uneconomic prices and on the other hand still ensure themselves against inflationary risks either by accumulating assets or lending at excessive rates. All the while the Fed’s balance sheet is obliterated. As Ray Dalio said, “I stress-tested my opinions by having the smartest people I could find challenge them so I could find out where I was wrong… and I learned a lot from a lot of great people.” These are my thoughts and I would very much appreciate your opinion of them if you can find the time.
Kind Regards,
CIGA Dustin

Dear Dustin,
Keep in mind competition between lenders will tend to modify your scenario.

http://www.swissamerica.com/images/p...1003025529.jpgCANDIDATES DUEL IN DENVER - DenverPost
President Barack Obama and Republican presidential nominee Mitt Romney face off at the first presidential debate Wednesday - an important moment for both candidates, but especially critical for Romney.
Presidential debates te
nd to reinforce, rather than sway, voter opinions. But in some instances, they can affect the dynamics of a race. Estimates show that more than 50 million people will watch the debate in an attempt to get answers about the economy, health care and the role of government.

EASY MONEY IS PUNISHING THE MIDDLE CLASS - WSJ
With the Republican Party committed to a gold commission and the Federal Reserve committed to easy money, a substantive debate about the principles underpinning our monetary system is finally in the offing. For sound money to carry the day, Republicans will need to do more than point out the still-hypothetical risks of easy money. The GOP will have to detail the harm that the middle class has already suffered as a result of a policy of low but persistent levels of inflation.

IT'S OCTOBER: IS THE STOCK MARKET CRASH-PROOF? - USAToday
"If something wicked this way comes in October, it is most likely to be war in the Persian Gulf," Edward Yardeni, chief economist and investment strategist told USA Today. A war would create global instability and fear. Oil prices would likely skyrocket, sapping what little growth there is out of the economy.
The coming stock market plunge will be sizable. More sizable than the last downturn in 2008-2009. The Dow could fall as much as 60%, says Harry Dent, author of The Great Crash Ahead and editor of newsletter Boom & Bust. "The Dow will hit a new low of 6000 or lower," says Dent. "Unfortunately, that is what investors have to look forward to."

I have based this rising channel on the peak volumes ( ticks) of recent 1h time line.

I guess there are some errors however the prmiss seems sensible or it it just luck?

As always just let me know!

Regarding volumes, is it posible we have an indi which looks as the range the bar covers, and devides it with the nuber of ticks?
I sugges it would show the stability of the bar rather than per .00o1 cent movement.

http://news.goldseek.com/GoldSeek/1349284954.php

Gold Wars revisited

2012-OCT-03

http://www.goldmoney.com/images/thum...gold-bars2.pngThe following is an essay version of a speech given by Spanish trader and economist Felix Moreno de la Cova, at a recent event in Madrid to mark the publication of the Spanish version of Gold Wars by the late Ferdinand Lips. GoldMoney would like to thank the Asociación Española de Metales Preciosos and Barbara Lips of the Lips Institute for their work on this project.


The sadly departed Ferdinand Lips left us an astounding legacy with this jewel of a book. It sends a powerful message that our political and banking elite would do well to remember, and is even more relevant now in light of current events.

Lips was a private Swiss banker and a leading gold mining authority. He was also a keen historian and sound money advocate – as best illustrated in Gold Wars, first published a decade ago. His direct contact with men at the centre of the monetary system like John Connally and John Exter meant that he knew first hand what was going on as the war on gold’s use as money progressed. His brave defence of Switzerland’s sound (gold) money tradition against the huge pressure that was brought to bear on his country is testament to both his intellectual courage and patriotism.

Gold Wars is the story of the rise of fiat currency and the demise of gold-backed money over the 20th century: from the collapse of the Classical Gold Standard at the outbreak of the First World War in 1914, through the protectionism and trade wars of the 1930s, to the rise of the Bretton Woods system postwar, and the failure of the London Gold Pool and Nixon’s “gold shock” in 1971. He examines the determined monetary war – or gold war – the globe’s financial elite fought against Switzerland during the 1990s, and how his country was sold out by its politicians and high financiers – a process Lips calls “the betrayal of Switzerland”. Readers may find it fitting that Lips ends his narrative in 2001, at the point of maximum pessimism in the gold market, but which is now clearly visible as the year in which the metal’s latest and perhaps greatest bull market got underway.

Ferdinand Lips knew that those who ignore history are condemned to repeat it. And here we are today – again faced with governments printing money on an epic scale. Only this time more or less the entire world is in on the act. Think of it as John Law’s Mississippi Bubble, as seen in early 18th century France, on steroids.

Lips’s message is not just about gold, because the real virtue of gold was both how it became money – freely and voluntarily chosen by the market and the people – and also about the role it played in preserving liberty.

Without a stable and independent unit of currency, there can be no property rights, and without these, savings and investment are impossible.

Capital accumulation is thus impaired if not totally prohibited, so slowing human progress to a crawl (if not total reversal). There can be no free market without honest money, just as there can be no trade without honest weights and measures – something that Juan de Mariana made very clear almost 500 years ago. And without a free market, human liberty is a mere concept. To exercise our liberty in a material world we need private ownership of the means of production so that individuals can control their own lives.

Applying these lessons to modern day Europe and the intellectual battle over the future of the euro, and it’s possible to say that the few virtues the euro still has can be abolished at the stroke of a pen by legislators and bureaucrats. Whether the euro survives a few more years or not is irrelevant: it will always be blemished by the original sin of being fiat money, imposed by decree instead of chosen by the people. Just as it was imposed by decree it will be manipulated by decree and always to serve the few at the expense of the many.

Gold is independent money. It cannot be created out of thin air, and even when it is outlawed, our rulers can never totally control it.

However, when fiat money comes crashing down and people anxiously demand a solution, there will be many different paths. There are those that aspire to one world currency managed by a world central bank, while others will hope for a return to monetary nationalism. Free market money, or sound money, will not be chosen unless the people understand its virtues and remember its history. Educating people so that they make the right choice is the most important thing we can do today. That is why Gold Wars is so important. That is why we owe Ferdinand Lips such a debt of gratitude and should pray that his words reach the widest possible audience.

It is not just a philosophical matter: after the collapse of the Continental Dollar in America, the USA’s Founding Fathers learnt their lesson and enshrined gold and silver as money in the US Constitution, setting the stage for America’s development into the most prosperous and economically free country in the world by the early 20th century. Contrast this with 18th century France. After John Law's catastrophic experiment with fiat currency, France’s post-Revolution rulers again tried forcing fiat currency on the people – the ill fated assignats – leading to wars, terror, the loss of freedom and bloodshed throughout Europe.

The choice will be ours.

Tags: fiat currency, gold standard, sound money, Switzerland
Author: Félix Moreno de la Cova

Good morning to all.

It is very clear from yesterday's price action that the market is not willing to make any moves until we get past this week's major risk events. Today we have the BOE (MPC) and ECB rate statements followed by the official ECB press conference with ECB President Mario Draghi. At the same time , the US Jobless Claims report will be released. Later in the day we have the release of the minutes from the last FOMC meeting in which they decided to announce QE3/QE-Infinity/QE-Fail or whatever you would like to call it. Then tonight we get the BOJ rate statement and press conference and finally tomorrow we get the much anticipated and highly speculated US Non-Farm Payroll report.

I am not 100% sure on which to place the most importance, but I would hazard an educated guess that the most important ones will be the ECB press conference, the FOMC minutes and tomorrow's NFP report. Today I am going to refrain from speculating what they might or might not reveal. Lately no decisions by key figures have made any sense and the reaction by markets to recent economic data just doesn't jive. Fact is that market has gone from extreme panic mode directly to extreme greed mode. Both these sentiments are grossly unfounded, but if I had to pick a side, I would tend to be more supportive of the fear side. I suppose we shall have to wait and see how it all plays out over the next 30 or so hours until the market closes tomorrow.

From a technical perspective, absolutely nothing has changed since yesterday as price is still very tightly rangebound and stuck in a flat consolidation in and around the 1.2940 to 1.2880 zone. Until we see a significant breakout to either side, in my opinion, this market is not tradeable (unless you're scalping the range).

So, buckle up your set belts later today. Like I said, I do not want to speculate on the short term market reactions to the upcoming events, but I do know that it should provide for some wild moves after such a period of tight ranging.

Best of luck and trade safe.

Pete Jackson's Order Board:

EUR/USD: Offers 1.2940/50 (SNB related and hedge funds) buy stops above and through 1.2970 ahead of stronger offers 1.2980/00. Bids from 1.2880/90 (sovereigns, real money) some light sell stops through 1.2875 ahead of more bids 1.2850/60 and further sell stops through 1.2845 ahead of tech supp 200 day MA at 1.2823.

Today's Euro FX Option Expiries @ 14:00 GMT:

EUR/USD: 1.2800, 1.2879, 1.2900, 1.2950, 1.3000

E/U H1:


E/U Daily:

edit.. A longer timeframe image.

just getting that feeling that even if they announced that the eu was to be broken up and the euro to be forgotten the euro would still go up.

i agree with all of the reasons for a euro decline, heck i'm in a euro short position, but i just think that we may have reached a point where they want it up and thats where it is going no matter what the charts, reports, etc say.

hope i'm wrong, very possible, for those of us with short positions...

have a good day everyone

1.2940 just been broken... I guess the next possible stop is at 1.2970...

In case you're wondering why we popped up... Yep, it's that hopiumized greed again.

Catalonia President Mas: Spain Used To Being Helped; Bailout Inevitable

Quote of the day:

"Spain is already used to being helped...No need to dramatize the situation; Spain had been greatly helped by the European Union in the past so as to develop economically...It's another matter entirely to know that there are certain countries that have a public opinion that they don't want it (the bailout) to be requested...External aid will be inevitable, so it would be better to face it without a lot of delay...I understand from the information we have that Spain will end up having to have a rescue...Spain has the potential to emerge from this situation but it needs help for a period." Artur Mas, President of the Generalitat of Catalonia

PipTrapper Bro,

My View in H4 Chart...

Price @ 1.2969 is Critical Point.
Possible... UPWARD go to Next Level 1.3045 and (maybe) Highest 1.3138

Can someone give me valid reason why Euro should be heading down soon ??? because I just cannot see it...

The DAILY Chart shows a nice Green Candle, which can possibly lead to a movement higher. On the other hand Bollinger Band and Keltner channels indicate a squeeze... MACD seems to be showing and upward movement but Awesome Oscillator ( Funny name I know...) seems to be going downwards... IT IS TO CONFUSING FOR ME TO DIGEST...


The Weekly chart indicates a movement higher as well and the indicators seemed to be working together.

PLEASE ! Correct me if I am wrong,

Laurynas

Down for FUTURE...

Check it use Weekly Chart

Search for VSA - Volume Spread Analysis.

Yep.... Def Long biased and am buying on all dips. They want it higher and that is where it is going. Europe may suck but obviously they don't see the Euro as high right now but possibly middle value. If it retests top and fails we know what will happen but until then the trend is up overall.

You are absolutely correct. The charts are confusing and the reason is quite simple... Too much CB intervention followed by the masses chasing the markets with money that has been sidelined since December 2011.

Make no mistake though... Once the manure hits the fan (and I suspect it will happen quite soon), one would be crazy to be hitting the buy button.

Tomorrow's NFP should set the tone for the USD for the rest of the month.

As for the Euro, I would hazard an educated guess that it is still way overbought across the board so the upside should be very well capped below the 1.3200 handle. From here we just need to be patient in the mid to long term view. If you're an intraday trader and/or a scalper, it's going to be a bit tough to trade through the the upcoming risk events this month. As such I suggest scalping a different pair such as AUD/NZD or the GBP/JPY.

Simply put, the hopium has pretty much run its course for this pair, but I still expect lots of volatility in the coming weeks. Of course the ECB press conference could change things a bit if Draghi is dovish on the economy and signals a rate cut.

Still working the hell out of the aussie

http://clip2net.com/s/2mw1W