Money Flow Trading Method along with Risk Management

http://www.321gold.com/editorials/gr...egen120716.pdf

Snippet: Gold and silver are obviously the big constant clearly illustrating what the best hedge is against currency devaluations. In all currencies except for the US dollar gold has outperformed all asset classes. And gold and silver will really take off and resume their secular bull market when the US dollar, the fiat currency of last resort, starts declining.



It is because gold and silver are inversely correlated with US dollars being expressed in the US dollars, they
are the mirror image of the reserve currency. If the US dollar is strong for fundamental reasons, not “last resort” reasons, there is no reason for gold and silver to be strong. And let me very clear for people that don’t understand gold and silver gold is not I repeat not a “barbaric relic” if there is any barbaric relic it is debt (paper money), which can be printed ad infinitum and is ruining the financial system. I equate paper money to manipulation and disorder and physical gold and silver to discipline and order. The BIS and ECB are now also publicly confirming that the US dollar is the real benchmark of risk, the real “fear indicator”.

On November 24 the ECB warned that there Is "significant risk of abrupt market reversal" One week after the BIS issued an unexpectedly stern, if completely ignored warning, that the surge in the US Dollar is leading to an abrupt tightening in financial conditions around the globe, making the repayment of trillions in USD-denominated cross-border debt increasingly more difficult and suggesting that the Dollar index itself is the new "fear indicator". This was followed by the European Central Bank warning that the risk of "abrupt" global asset market corrections "have intensified" on the back of rising political uncertainty, which poses a threat to banks, stability and economic growth. “More volatility in the near future is likely and the potential for an abrupt reversal remains significant amid heightened political uncertainty around the globe and underlying emerging market vulnerabilities,” the ECB warned in its twice-yearly Financial Stability Review published on Thursday November 24.

The conclusion thus has to be that the dollar is not getting stronger because its solid fundamentals but because the immense amount of US dollar debt that is being repaid by EM countries and corporations and the dollar loans that are not being rolled over. If the dollar strengthens much more it will kill even more US offshore earnings which account for 50% of profits of the S&P500 companies which will lead to further translation losses. And with interest rates rising in the US and across the world something will have to give!! Where is the growth coming from? There is no growth to speak off. Just look at the velocity of money in the US, which is at historic lows whilst the B/S of the Central banks grew to $19-20trn! It is the clearest indication that there is no confidence, no growth.

Talking about elections the NO vote for the Italian referendum, held on December 4, is almost a certainty with potentially very upsetting results. A EU breakup as a result of a NO vote cannot be excluded next to the fact that Italian debt yields could go up significantly following the ensuing uncertainty? The snowball effect could hit International banks having lent Italy €550bn with the French banks holding in excess of €250bn in Italian debt. Next to that the Italian banks have €360bn+ in NPLs or Non Performing Loans. By the way the restructuring of Monte Paschi will take place on Monday November 28! Good luck with that buying in pensioners. Cyprus is around the corner and this is only the beginning.

Several people have warned of the “unintended consequences” of Dodd-Frank, which are crushing bond market liquidity. Wall Street responded to Dodd-Frank by shutting down its proprietary-trading desks and shrinking inventories of securities like bonds. The government though allows banks to continue trading securities in their capacity as market makers, serving as intermediaries between buyers and sellers. Regulators have said banks must show that the amount of bonds and other securities they hold on their balance sheets don’t exceed what they need to meet “reasonably expected near-term demand. Next to that a growing volume of bond trades are circumventing market makers altogether crossing bonds internally. The volume of bond sales being crossed internally thus further exacerbates the lack of liquidity in the $100 trillion global bond market.

”On the day of Brexit we got a glimpse of what can happen when the world's most liquid bond market suddenly isn't and as one veteran bond trader exclaimed, the US Treasury market liquidity is "worse than Brexit." U.S. government-bond yields were deviating on average from a fair-value model. By that measure, the deterioration of liquidity in Treasuries has been the most severe since the U.K.’s June vote to exit the European Union.

Since its lows in May of 2014, short-term USD borrowing costs (1M Libor) have quadrupled. As the 100%-priced-in December rate-hike looms, the cost of funding for American businesses is once again on the rise, now at its highest since December 2008.




For now, it seems, the most levered US equity market ever appears ignorant of this rapid tightening of financial conditions...

Unfortunately, it leads to a rather ominous conclusion. The bouts of illiquidity will continue until central banks stop distorting markets. If anything, they seem likely to intensify: unless fundamentals move so as to justify current valuations, when central banks move towards the exit, investors will too.

As mentioned here above if we break the 3% on the 10y treasuries we will break out of the 35-year range and we will have fireworks. What also adds to this probability is that the Chinese are selling a record amount of Treasuries and the Russians and Saudis are doing the same. Who wants to remain in treasuries till the end of the year and risking even higher losses on bonds when everybody is selling into the “rally” hence why we don’t see the yields really going below the 200 daily moving average of 2.20%. In my point of view everybody is selling into the rally especially because of the created illiquidity by the CBs and the regulations. Next to that the reverse repos are trending much higher and show peaks not even achieved in 2008. It is showing me that there is a huge demand for collateral because so many positions are under water hence why the Fed is providing treasuries. In other words it is a mess in the world, which very quickly could get unglued because of the rate hike, the Italian NO vote or the break out of the 35-year interest range exceeding 3% and showing its ugly face.

To finish I wonder how many people really have a clue what is going on till it all happens? It is the same with AIG that kept on issuing CDS to players like Goldman Sachs because they thought that the events of 2008 would never happen. And we have seen what happened, an almost systemic breakdown of the financial system. These days any size is moving markets drastically, and the machines just make it worse. Interestingly it seems so far higher bond yields are not weighing on stocks yet though if the 10y yields break out above the 3.00% there will be no escaping. Though this time it will be at least 10x 2008 and be aware we don’t have any ammunition left to rescue the markets and any QE or other cash infusion will instantly dilute and implode the reserve currency a la Zimbabwe.

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

https://dailyreckoning.com/critical-...y+Reckoning%29

Snippet:
The board has tilted so far the market’s now drawing comparisons to 1929…

What’s drawing the comparison? Valuations. By some measures, stocks are as expensive as ever compared with their earnings. P/E ratios measure share prices to earnings. For example, if the market value of a stock is $50 and the company generates $3.00 per share in annual earnings, its P/E ratio is 16.6 (50/3=16.6).
There’s something called the Shiller P/E ratio, named after the Yale economist who conjured it. It measures P/E ratios over a 10-year period. It carries a lot of weight among the smart set. Many argue it’s been a reliable barometer of future stock returns going back to 1871.

And according to MarketWatch’s Brett Arends, Shiller’s famous ratio has “just gone from flashing amber to flashing red.”

The average S&P Shiller ratio over the life of the S&P is 16.7. This week, it jumped to a skyscraping 27.9. That puts it within hailing distance of the October 1929 peak of 32.6.

“This is about the same level that the market hit just before the crash of 1929, and is far higher than was seen in 2007,” Arends warns. “The last time we saw the stock market this expensive on this measure was early in 2002 — just before stocks plummeted.”

The Shiller P/E ratio “has been exceeded only in the 1929 mania, the 2000 tech mania and the 2007 housing and stock bubble,” adds analyst Alan Newman.
David Stockman discussed this ominous milestone in last night’s urgent market briefing:

We’re at an inflection point that I haven’t seen in my lifetime, and I’ve been involved with Washington or Wall Street for the past 40 years… Today, the market is oblivious to how far out of proportion valuations are because it expects more stimulus from the Fed.

In case anyone here reading any of these articles or my comments has any questions please feel free to post your questions. No question is stupid and you can only learn by asking questions. I see now that there are 10 traders reading this and only myself is a member so it is simple and easy to register so that you can post anywhere in Forex Factory and also enter into a discussion with me on these important world changing issues if you care to. Have a good evening.

Benjamin

This article from Zerohedge will summarize the serious position all of are in at this moment. You cannot stop it however being aware of it takes you out of the category of sheep or uninformed citizens of the world.

http://www.zerohedge.com/news/2016-1...ops+to+zero%29

Snippet:
“There’s no non-messy way out of this,” said Luke Ellis, chief executive of Man Group, one of the world’s biggest hedge-fund firms with $80.7 billion in assets. “There’s two versions” of how this ends, he added. Either central banks could move to so-called ‘helicopter money,’ where they buy debt from the government, which then spends the proceeds or gives it to the population to spend. This “for a few years looks golden then leads to hyperinflation,” he said. Or the speed at which money circulates within the economy could grind to a halt. “Then you effectively have a barter economy,” he said.

In a series of exclusive interviews with the Journal, hedge-fund executives overseeing around $280 billion in total highlighted a range of problems created by quantitative easing. The problems they highlight are precisely those that QE was designed to solve, and are exactly the same problems we warned about since the 2009, for which we have been repeatedly branded some variation of "fake news." Now the skepticism has become mainstream.

This is what, according to the hedge fund managers interviewed by the WSJ, will happen:

Damage to economic growth
Rather than kick-starting growth, quantitative easing may do the reverse. Some managers fear it distorts financial markets and undermines capitalism. That system relies on profit-hungry investors to differentiate between strong and weak companies—funding the strong while letting the weak die. QE, say some managers, doesn’t differentiate.

For instance, the Bank of England is buying the debt of firms it deems make “a material contribution” to the U.K. economy. That has led some investment banks and companies to create new debt especially for it to buy. The ECB has bought €48.2 billion ($51.2 billion) of corporate debt since June, but the hoped-for private-sector investment hasn’t materialized.

“What does a market do? It’s a voting mechanism,” said Michael Hintze, billionaire founder of hedge fund CQS, which runs around $12 billion in assets. “Instead you’ve got this 800-pound gorilla out there who’s hovering up assets. “There’s a misallocation of capital and an opportunity cost to the real economy,” added Mr. Hintze, whose portfolio is up 30% this year, ranking it one of the world’s top-performing hedge funds. “It means GDP is not growing as much as it might.”
Some put it even more strongly. “It’s definitely destructive of economic growth,” said Crispin Odey, founder of Odey Asset Management, which runs $8.2 billion in assets.

“Capitalism dies a death,” said Mr. Odey, who sees government policy as the main factor influencing markets. His fund, a top performer after the credit crisis, is down sharply this year because of being too bearish. “It’s all policy. It’s the Kremlin. And I’m in the gulags.”
* * *
Damage to society
In her speech to the governing Conservative Party conference in October, U.K. Prime Minister Theresa May spoke of “some bad side effects” from quantitative easing as people with assets got richer while those without them suffered. U.S. President-elect Donald Trump has said low rates have robbed savers. Those side effects include “envy and distress” within society, “as people think ‘I can’t get out of where I am,’” said Andrew McCaffery, group head of solutions at Aberdeen Asset Management, who looks after $170 billion in assets.

Ultralow interest rates mean the large part of the population with few financial assets begins to despair of how to generate income to fund retirement, he said.
“People see a developing black hole,” he said. This “increases the sense of there being little to lose for many” people.
Andrew Law, chief executive of New York-based Caxton Associates LP, which runs around $7.8 billion, said quantitative easing averted economic depression after the financial crisis.

But he added: “The losers of QE are society, and democracy is also a loser, because central banks are not publicly elected officials.”
* * *

A Very Important Article To Explain The Situation With American US Dollars.

https://dailyreckoning.com/emerging-...y+Reckoning%29

Snippet:

An Emerging Dearth of Dollars

Uh-oh: The mainstream is starting to fret about the great dollar shortage.
With the help of Jim Rickards, weve been delving into the paradox of a dollar shortage periodically since September. The paradox is this: While the Federal Reserve blew up its balance sheet by $3.4 trillion between 20082015, the world created new dollar-denominated debt faster than the Fed created money, as Jim explains it. Indeed, more than $60 trillion of new dollar-denominated debt came into existence during this time.

Its all good as long as the dollar is weak. But relative to a large basket of foreign currencies, the dollar is approaching its strongest level at any time in the last two decades
https://dailyreckoning.com/wp-conten...22-768x491.jpg
When the dollar goes up, it directly impairs the risk-taking capacities of banks and investors alike, writes Hyun Song Shin, chief of research at the Bank for International Settlements.

As you might know, the BIS is the central bank for central banks. Jim Rickards says unlike many central bankers, the BIS folks are pretty sharp cookies. Mr. Shin, according to The New York Times, is concerned the dollars rise will worsen what he refers to as an emerging dearth of dollars, which could bring back memories of the financial crisis in 2008 and 2009. Back then, a global rush into dollars caused short-term borrowing rates to skyrocket, forcing hedge funds to shut down and banks to fail.

The dollar shortage is even getting the attention of mainstream strategists like Paul Christopher at Wells Fargo Advisors: In the type of global economy we live in, [Federal Reserve chair Janet Yellen] has to be careful about the dollar increasing too much, creating dollar shortages and liquidity problems as a result.

Alas, Fed leadership is clueless. Quelle surprise. And so they plow ahead with plans to raise its benchmark fed funds rate next Wednesday which will have the effect of further strengthening the dollar.

As we pointed out last month, Fed Vice Chair Stanley Fischer said he was reasonably confident foreign economies could absorb the impact of that move: The dollar would strengthen further, yes, but it wouldnt necessarily tank the value of foreign currencies.

Jim Rickards called this wishful thinking.
Lets go back to that $60 trillion of dollar-denominated debt thats come into being since 2009. As Jims pointed out for the last two years, about $9 trillion of that total was issued by companies in emerging markets; those companies need a weak dollar to keep the cost of servicing that debt from spiraling out of control. But the dollars been rising relentlessly since mid-2014.

Also on shaky ground is $5 trillion in debt issued by U.S. energy producers. It was bad enough most of that debt was issued on the assumption of $80-plus oil prices into perpetuity. (They’re $51.45 this morning.) But this is worse: “A strong dollar implies lower oil prices,” Jim reminds us, “despite OPEC’s machinations.”

Reminder: A strong dollar is the only reason gold is so weak right now. The bid is down to $1,161 this morning, retesting a 10-month low.
“A strong dollar implies a lower dollar price for gold,” says Jim. “A weak dollar implies a higher dollar price for gold.” Look no further than the chart above. The emerging dearth of dollar’s all-time low came in August 2011. Gold touched its all-time high within a matter of weeks.

“Further evidence,” says Jim, “comes from the fact that gold is performing much better when measured in Japanese yen, Chinese yuan and euros. In other words, the recent price action is not really a gold story; it’s a dollar story.”

Not that it makes gold’s recent swoon easier to take if you transact mostly in dollars, but that’s the story.

“In the short run (one–three months) the strong dollar, weak gold story may continue,” Jim allows.

“Beyond that, the strong dollar will strangle the U.S. economy with imported deflation and weaker exports.” Oh, and it’ll worsen the great dollar shortage and threaten to detonate a large portion of that $60 trillion in dollar-denominated debt we mentioned.

Then the Fed will have to reverse course. Jim figures by next spring. Gold holders, keep the faith. “Gold is in the doldrums now, but it is poised for a strong comeback when central bankers confront the unsustainable reality of higher real rates on dollar debt.”
Regards,

Dave Gonigam

Monthly Chart on US Dollar Index
http://finviz.com/futures_charts.ashx?t=DX&p=m1

Have a LOOK at it and the article will be easier to follow and understand.

The Wrap Up - Nightly


https://srsroccoreport.com/market-in...le-in-history/



Snippet:
Investors have forsaken all reason, logic and wisdom by rushing into the biggest stock and financial bubble in history. Even some precious metals investors are selling their gold and jumping into the markets hoping to make big profits as President Trump takes over the White house in six weeks.

Unfortunately, the worst time to jump into a market is when everyone else is doing the same thing. Of course, this doesnt mean the Dow Jones Index wont continue higher for some time, but the fundamentals of the economy continue to rot from the inside out.

No one really notices this as automobile dealers are now selling cars with zero interest rates, nothing down and no payment for 6 months. If this is the sort of business model the automobile industry has to resort to in order to continue sales, we are in big trouble.

Then we have these few headlines pointing to a worsening U.S. economy:
Restaurant Industry, Leading Indicator of US Economy Sours, Bankruptcies Pile up
ESPN Loses A Record 621,000 Subscribers In One Month
Greenspan: Western World Headed for a State of Disaster
The Housing Market Is Waving A Red Flag
These are just some of the many headlines pointing to an economy and stock market that is not heading towards better times. It was interesting to read that ESPN lost 621,000 subscribers in one month. However, ESPN has lost over 15 million subscribers in the past five years.

Market Insanity Pushes The Dow Jones Up To Tulip Mania Heights
I wrote about the 17th century Holland Tulip Bubble in a previous article:
Nothing has changed since the 17th century Tulip Bubble that also destroyed the ability of people to act rationally. At the peak during the Holland Tulip Mania, some tulips were selling for 10 times the annual income of a skilled craftsman (Source: wikipedia)

According to Wikipedia about the Tulip Mania:
. the growing popularity of tulips in the early 17th century caught the attention of the entire nation; the population, even to its lowest dregs, embarked in the tulip trade.[6] By 1635, a sale of 40 bulbs for 100,000 florins (also known as Dutch guilders) was recorded. By way of comparison, a ton of butter cost around 100 florins, a skilled laborer might earn 150 florins a year, and eight fat swine cost 240 florins.[6] (According to the International Institute of Social History, one florin had the purchasing power of 10.28 in 2002.[35])

https://srsroccoreport.com/wp-conten...lbs-Bubble.png

As we can see from the chart, investors lose all economic and financial sense when asset prices start to go insane. Instead of using some restraint and wisdom, they drop all reason and jump in on the rising bandwagon.
Again, the worst time to get into a market is when everyone else is jumping in with both feet. I have updated my chart showing the increase in U.S. Debt vs the Dow Jones Index since the first quarter of 1980:

https://srsroccoreport.com/wp-conten...1980-Today.png

In 36 years, the Dow Jones Index and the U.S. Debt have increased at the same exact ratio 23 TIMES. This is no mere coincidence. Investors who have parked their hard-earned money into market have placed their bet on stocks that are backed by nearly $20 trillion in U.S. debt.

In 1929, right before the Great Depression hit, the U.S. debt was $17 billion versus a $105 billion Gross Domestic Product (GDP). Thus, the U.S. debt accounted for 17% of the U.S. GDP. If we fast forward to today, it is a much different picture.

The U.S. Debt is now 105% of the U.S. GDP. Basically, the U.S. economy is powered debt… and a lot of it. President Elect Trump may have grand ideas for the U.S. economy, however his hands will be tied by the massive debt and terrible energy predicament overhanging the country.

According to the sources I have read, nearly 10% of U.S. oil production is being produced by either bankrupt or financial challenged energy companies. I also mentioned in a prior article that the largest oil company in the U.S., ExxonMobil, had to borrow $8 billion in 2015 to pay dividends or CAPEX. Number two Chevron had to borrow even more at $18 billion to pay dividends and CAPEX in 2015.

This is not a good sign for a healthy market to invest in.

Unfortunately, this will not stop more precious metals investors from selling their gold to play in the Dow Jones Casino. The reason to hold onto precious metals is to protect oneself when the FAN FINALLY HITS THE COW EXCREMENT.

Who sells their homeowner or automobile insurance to play in the stock market? This is how insane the mentally of investors has become.

FINAL COMMENTS: You will NEVER read about these matters in the Mainstream Media. As part of my trading skills I decided 10 years ago that I needed to know and understand all these associated matters in order to understand what was really happening behind the scenes.

This is how I was able to develop My Money Flow Method over the last 5 years and it is why I am able to generate a ROI (Return On Investment) of 10% a month.

There of course is much more to achieving these results. There is NO TRADER whether trading Equities or Commodities or Forex that can succeed unless they have the DISCIPLINE to CONTROL first their EGO. (The Market Is Always Right) Then control their GREED and finally most important their FEAR !!!

Good Evening an enjoy your weekend.

Benjamin

https://dailyreckoning.com/coming-ec...y+Reckoning%29

Snippet:
The Coming Economic Winter

To everything there is a season, Ecclesiastes tells us

What if the economys entering winter?

In spring the thrusting saplings of tomorrow shoulder their way out of the earth. Buds appear on the trees. The days lengthen. Its the season of possibility.
Summer is nature in full flower. Green and lush. The promise of spring made good. The days are long and carefree.
In autumn the first wrinkles of age appear. The trees go gray and start losing their hair. The first frosts arrive, a foretaste of days to come
Then comes winter. Snow. Ice. Dark. Desolation. Its the season of death.

It can be said economies follow a similar cycle of the seasons. They sprout, blossom, fade and die
The Daily Reckonings Charles Hugh Smith argues winter may be closing in

Charles says the world is now marked by souring social mood, loss of purchasing power, stagnating wages, rising inequality, devaluing currencies, rising debt, political polarization and elite disunity.

These are all characteristics, Charles laments, of the long-wave social-economic cycle that is entering the disintegrative (winter) phase.
Charles leans on the work of historian Peter Turchin, who explores historical cycles of social disintegration and integration over 50-, 150- and 200-year cycles in a new book, Ages of Discord.

Turchin identifies three primary forces driving these cycles: An oversupply of labor that suppresses real wages an overproduction of parasitic elites a deterioration in state finances (Charles explores these in greater detail below.)
These cycles are as natural as the seasons, and maybe as inevitable.

NOTE TO READERS: I will build up a summary of factual information on this particular post in order to bring you to the RESTRUCTURING of the collapse of the oldest bank in the world located in Italy and the results of the actions of the directors that is scheduled for Sunday, December 11, 2016. If you have any questions please post them and I will do my best to answer all your questions.

http://www.telegraph.co.uk/business/...ts-eu-conduct/


Snippet:

Italy is to nationalise Banca Monte dei Paschi di Siena as soon as this weekend, wiping out investors in a dramatic escalation of the country’s banking woes and political crisis.
The Italian treasury has been left with no other option after the European Central Bank refused to give the crippled lender more time to clinch a deal with private funds.
Shares of MPS instantly plummeted 16pc on the Milan bourse before trading was suspended, setting off tremors through the Italian banking sector. Junior bonds issued by the bank crashed by half within minutes, reflecting the estimated "haircut" under EU burden-sharing rules.

“The ECB is committing a grave error. It is unacceptable,” said Antonio Damiani, head of the banking union CGIL. “There must now be an immediate public rescue to secure Monte Paschi and head off any systemic risk for banks in trouble. This is a matter of urgent national interest.”

The bank’s president, Alessandro Falciai, sought to calm nerves but misfired badly with his choice of words. “I am not in the least worried,” he said.
Analysts said it was extraordinary that the ECB had ignored pleas for a delay given that Italy has been chaos since the collapse of Matteo Renzi's government, and that it should have dropped its bombshell during trading hours.

“The decision is very strange. They are giving the impression that they want blood on the floor, perhaps by forcing a resolution of the bank to set a precedent,” Lorenzo Codogno, ex-chief economist of the Italian treasury and now at LC Macro Advisors.

“There is a risk that there could be panic and a chain-reaction if investors start asking who is going to be the next victim,” he said.
The treasury is expected to opt for a "precautionary recapitalisation" to meet the €5bn target set by EU regulators, but this amounts to state aid. It requires a "bail-in" of bondholders and depositors over €100,000.

Beppe Grillo, leader of rebel Five Star Movement, was on the warpath within hours, exhorting Italy to take matters in its own hands and defy Frankfurt, saying bail-ins violate explicit constitutional safeguards for savers.

https://mishtalk.com/2016/12/09/ecb-...i-paschi-plea/

Snippet:
A state-led rescue of MPS is expected to include protection for its smaller investors, people involved in the talks said.
The long-mooted state rescue of MPS, which already has the Italian Treasury as its largest shareholder, could poison relations between Rome and European authorities.

MPS has a market value of just €635m, having lost 85 per cent of its value this year.

The bail-in of MPS is expected to have implications for the rest of Italy’s banking sector. Shares in UniCredit, Italy’s largest bank by assets and only globally significant bank, were down nearly 6 per cent following the reports. Bankers expect that UniCredit will have to put a lower price on a €13bn equity raising it is planning for early in 2017.

Monte Paschi’s board is investigating options including immediately triggering precautionary recapitalisation.
Individual junior bondholders may be wiped out unless they can present evidence they were duped into buying shares. Large holders of junior bonds are guaranteed to take a massive hit in a forced buy-in.

Collapse of Monte dei Paschi
https://mishgea.files.wordpress.com/...ng?w=529&h=404

http://www.oftwominds.com/blogdec16/cycles12-16.html

Snippet: Gordon Long and discuss these overlapping/ reinforcing social, political and economic cycles in a new video Cycles: Anti-Globalization and the Debt Super-Cycle. Here is a chart from the program that displays the rise of political polarization:http://www.oftwominds.com/photos2016/polarization.png
As for rising wealth/income inequality, the apex controls the money and thus the power:
http://www.oftwominds.com/photos2016...yramid2015.png
Gordon and I also discuss the many different cyclical analyses that are now overlapping. Cyclical analyses based on demographics, socionomics, debt, wages and prices are all issuing the same conclusion: we're in the Disintegrative Winter phase of a multi-decade socio-economic cycle.
Here's our discussion of Cycles: Anti-Globalization and the Debt Super Cycle (30 minutes):

Gordon's abstract of the program: Cycles and the End of the Debt Super-Cycle

Hi Benjamin: I may suggest that you share your knowledge publicly to allow readers to exchange with you and build some relationship with them. I think through this way, everyone is winning and you don't have the workload of assessing everyday how your trainees did. Personally, I can't afford one hour everyday, but I'm willing to learn at my pace.
This said, I would thank you for your offer.

I will post tomorrow how to go about opening a Demo Account with FXCM UK and if you would like to tell posters about this thread then of course he would make the thread more interesting for everyone. That is one of the reasons that I encourage people to register with Forex Factory so that they can post.

THE WHOLE POINT OF THIS THREAD IS TO HELP TRADERS LEARN FROM A PROFESSIONAL TRADER HOW TO TRADE AND WITHOUT RISK FINANCIALLY SHOW HOW TO LEARN THE RIGHTS HABITS where it is accepted that 95% of all Forex Currency Traders lose. You can learn how to get into the 5% category only if you can learn to first CONTROL your Ego , Greed and FEAR !!!

It is quite easy to open a $50,000 US Dollars Demo Account with FXCM UK. Just log on and click on the link to open a $50,000 US Funds Practice account and set it to currency in US Dollars and you get your User Name and your Password. DO NOT DO ANY TRADES until I explain to you the 16 Symbols that you need to set up on your Trading Platform. You can post questions on this thread. I will answer promptly. Thank You.

Psychological Challenges of Speculative Trading

An Extract from the book of “Beat the Odds in Forex Trading” by Igor Toshchakov, published by Wiley

A successful trader’s career mainly depends on his or her psychological stability in stressful situations, which are common in the process of trading. Theoretical knowledge can be acquired by reading professional literature; practical skills and experience are acquired in the process of actual trading. The most difficult process is adjusting psychological stress, because in real life it is impossible to completely eliminate the stress factor influencing human activity. Underestimating the stress factor could play a mean trick on trader and even completely block their abilities to make reasonable decisions in real trading situations. The psychological stress of those trading in the FOREX (and any other) market is extremely high. Traders must work under permanent psychological pressure, making decisions in highly unpredictable and uncertain market situations.

Each trader goes through mistakes, failures, and losses in his or her own way, in accord with his or her personality and temper. Some might blame their failure on market’s “wrong behaviour”, which didn’t comply with the trader’s brilliant forecast and caused the failure of the magnificently planned speculative combination. Others blame themselves and their own inabilities to make right decisions in situations, which afterwards seem to be simple. It is an interesting fact that, in hindsight, traders usually find the decision that should have been made at the lost critical moment and can reasonably prove their point of view. Why can they find the right decision so easily and quickly in hindsight? Was the trader unable to do so at the right moment? I don’t think it can be simply explained by looking at yesterday’s situation from today’s point of view. I do not think it can be explained by the fact that classical technical analysis at allows for multiple explanations of almost any market situation. It is always possible to find an appropriate basic explanation for any market shift after the event takes place. In the heat of the moment, however, the trader was influence by stress, and that stress caused the error. This is proven by the fact that most novice traders show exceptionally good (and even phenomenal) results trading dummy accounts but can’t even come near those result when trading with real money.

Being permanently under stress, a trader can often make insufficiently considered, impulsive, and therefore, wrong decisions that result in losses or premature liquidation of profitable position, that is, in lost profit. Sometimes, after a few successive failures with various trades, traders become fearful of the market. They are in as state of psychological stupor, and even a simple market situation may cause panic. They cannot overcome their emotions or soberly evaluate the current situation, and they are unable to make any decision – reasonable or otherwise. In many cases when the market situation shifts against the trader’s position, they can only passively watch the growth of their losses, because they are unable to make any decision at all. Often, after the market stabilizes and traders have the opportunity to calmly analyse daily diagrams of currency fluctuations, they come to the conclusion that the main cause of failure was not the lack of knowledge or training but their own emotions. However, the situation cannot be reversed. Time has passed, money has been lost, even everything should be begun again.

Another problem that causes severe and even catastrophic consequences is the trader’s wilful thinking. In this case, treaders are sure that their forecast of market trends is solely correct. They feel the market cannot and should not give any surprises. They do not consider other options that could be helpful or they think of other options in a vague and uncertain form. Sometimes, traders consider a market shift against their positions. They acquire new contracts at a lower price in the hope that the market situation will come back, and all the positions will become highly profitable. Afterwards, as the situation worsens, they will be able to come out of the market without serious losses. Being sire they are right, traders lose the ability to critically evaluate the condition of the market and accordingly their own position in the market. In this case, they consider only those basic and technical features that justify their wishful thinking, and they discard the contradicting features. This wishful thinking costs them dearly and can lead to psychological frustration. The market’s “wrong behaviour” not only deprives traders of a certain amount of money and often ruins their trading account, but also undermines their self-esteem and their hopes of being a winner in the trading battle.

After such a loss, traders blame themselves, repeatedly going through the details of the unsuccessful trade. They blame the market for the “wrong behaviour” or themselves for errors in what then seems an absolutely clear situation. Sometimes, the trader-market relationship takes the form of a vendetta. Traders consider the market as their personal enemy, treat it in an unfriendly way (even with hate) and dream of immediate revenge. Doing so, they miss the fact ht at they are essentially blaming nature for changing sunny weather to rain. It is very important to be prepared beforehand for this change. Traders should always have close at hand one or few options in case of sudden change of the situation/weather, so that their foresight assures their good time or good profit.

The third main psychological problem is trader uncertainty, especially when traders are inexperienced in abilities and skills – specifically about each market position they hold. Immediately after each position is opened and a money contract is bought, treaders start questioning their choices. This is revealed most vividly in the case of a moderately active market at the moment of fluctuations close to the opening price of the position. Any moment (even insignificant) against their position causes traders to have an irresistible desire to sell the recently acquired contract to limit losses, until it is too late and the market does not shift too far away from their position opening price. On the other hand, an insignificant market shift in the desirable direction causes the same desire to eliminate the position, until it provides for any (even tiny) profit and before this profit does not turn into losses.

Sacred and trouble traders rush and race about. They open and liquidate their positions too often, and experience many small losses and gains. Within a short period of time, they turn intermittently into bulls or bears. As a result, they suffer losses on a dealer’s spread and/or commissions when there were no significant market changes, and all the market fluctuations were no more than just regular market “noise”. Such losses are typical for beginners and individual traders with small investment capital or little experience and insufficiently psychological preparation.

Not uncommon are cases of traders’ impulsive decisions on trading, without any plans or serious preliminary market analysis. The position is opened under an impulsive, invalid emotional reaction. Often, it can be explained by traders’ fear of losing a brilliant opportunity to earn money they think is being offered by the market at that moment. I have witnessed these attempts to jump onto the last carriage of a departing train, and such attempts have ruined a lot of traders. Many traders cannot calmly watch any kind of market movements. Some of my students have confirmed this reality. If they have no positions at the moment of more or less significant market movement, they consider it as a lost opportunity to gain profit. This can inflict a serious shock to them.

When they have no position, they seem unable to realize that each market movement can be considered both ways, and the opposite situation can quite possibly develop. Statistics show that, at each market movement, the chances to lose are much higher than to profit. How does it happen that reasonable people (who in everyday life, without any emotion, can watch a bank casher counting other people’s money) consider the fact of market movement as a threat to their own pockets? Why is other people’s money in the hands of a bank cashier not considered as a lost profit, whereas capital shift on the market and the corresponding quote fluctuations are causes of negative emotions? I think the answer is in the illusory simplicity of business itself, which is considered by many people as a good and simple opportunity to earn a lot of easy money. Similar notions are widely spread among novice currency traders. The soon traders abandon such ideas, the sooner they become professionally efficient traders.

The most difficult problem for every trader (regardless of their experiences) is to learn as quickly as possible how to recover quickly from losses, which are inevitable in this business. At the same time, they must learn to handle shocks and psychological damage inflicted by the losses, because there situations could negatively influence their future work.

The losses themselves and the fear of losing, both of which permanently torture traders, negatively influence their ability to make reasonable decisions in a complicated situation. These factors also undermine traders’ ability to follow their own rules about trade strategies and systems.

I have become personally acquainted with hundreds of traders and have watched their activities. I have taught many students, and have had my own experience as a trader at various steps of my career in the currency market. Therefore, I have come to the conclusion that the main causes of trader failures in speculative operations in the FOREX marker are without a doubt those associated

http://www.reuters.com/article/uk-eu...-idUKKBN13Z0P2

This article seems to confirm that Italy itself will be directly involved in the rescue of this bank. The consequences will have far ranging effects.

We should have major news on December 11, 2016

People will come and subscribe to this thread when they see the seriousness and benefits. I invite you to have a look to the "Really Useless Thread" where serious people share ideas and to some extent trust Sisse who is not even the owner of the thread. By this example, I mean people will come to your thread as soon as they see some advantages. Wish you good luck and success.

By David Stockman. Posted On Friday, December 9th, 2016
https://anthonybsanders.files.wordpr...ng?w=585&h=439

A MUST WATCH VIDEO concerning the FED and it's decision on December 14, 2016.

My second trade plan as I now am completely out of Short EUR/USD.

My first trade plan is short USD/JPY to at least 1.05 and my second trade plan is long Gold until $1325.00.

http://wolfstreet.com/2016/12/10/gov...rs-sixth-week/

Snippet:
The bond market is doing the math.
Traders got even more nervous on Friday, after having been twitchy all Thursday, and they alleviated this condition by selling government bonds.
In July, government bonds were sitting ducks with their low yields, and perfectly ripe for a good plucking. This plucking has now proceeded relentlessly and has entered its sixth week in a row, after an already rough four months.
The price of the 10-year Treasury note swooned on Friday. The 10-year yield, which moves in the opposite direction, rose 6 basis points to 2.47%, the highest yield since June 2015. Since early July, the 10-year yield has jumped by 1.08 percentage points! That’s a 77% move (via StockCharts.com):
http://wolfstreet.com/wp-content/upl...2016-12-09.png
The 30-year Treasury yield jumped 7 basis points on Friday to 3.15%, the highest yield since June 2015, which elegantly crowns a 50% move in six month (via StockCharts.com):
http://wolfstreet.com/wp-content/upl...2016-12-09.png
US government bonds are considered among the most conservative investments in the world because they’ll never default. They will always get redeemed at face value since the government, via the Fed, can always print enough money to take that risk off the table, though the bonds’ purchasing power might get crushed in the process

http://www.reuters.com/article/us-gl...-idUSKBN1400I8

Snippet:

"What happens in financial markets does not always stay in financial markets," BIS Head of Research Hyun Song Shin said. "Financial disruptions can have a real economic impact."

"How the evolving FX market affects risk-sharing is still uncertain, but this is a matter of first-order importance. Any major changes to liquidity conditions might have consequences for market risk and the effectiveness of the hedging strategies of corporates, asset managers and other foreign exchange end users."
The report in September showed global currency trading fell to a daily average of $5.1 trillion last April, a 5.5 percent from the $5.4 trillion average three years ago and the first broad contraction of the market since 2001.

BIS said the main driver of this had been a fall off in trading by hedge funds and other speculative investors, which they said had been pushed lower by the closure of some bank prime-broking businesses and trimming of others.

Prime-broking refers to the arrangements by which banks provide trading lines and the credit that speculators use to make big leveraged bets on currencies.
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BIS also warned about risks from the market's major banks, as well as a new breed of non-bank electronic traders, raising the amount of flow that is "internalized" - i.e. matched off to other orders internally rather than traded with another party.

It said that also came with a weakened role for anonymous trading platforms like those run by Reuters News parent company Thomson Reuters (TRI.TO) and ICAP-owned EBS Brokertec (IAP.L) in favor of direct relationship based trade.

UPDATE on Italy

https://www.theguardian.com/world/20...prime-minister

Snippet:

The biggest and most immediate crisis facing the incoming prime minister is a financial one. On Friday, the European Central Bank rejected a request by Monte dei Paschi, the world’s oldest bank, for more time to arrange a necessary capital infusion by a consortium of private investors. The decision means that the Italian government may have to intervene to save the Siena-based bank, which is facing collapse because it holds billions of euros of non-performing loans on its balance sheet.


The board of MPS was expected to meet on Sunday night. The swift choice of Gentiloni could be seen as an attempt to assuage nervous investors and save the proposed recapitalisation of the bank.

Mattarella’s decision to pick Gentiloni means that he has the backing of the current parliamentary majority, led by his own Democratic party (PD). But his stint will be a temporary one with both the PD and its opposition, the anti-establishment Five Star Movement, pressing for early elections.

Italy is awaiting a critical decision by the constitutional court on the legal status of the country’s electoral law. The ruling is expected on 24 January. Once the decision is heard, it will have major consequences on how parliamentary seats are distributed in future elections.
If things go according to Renzi’s plan, Gentiloni would resign and new elections would be called once the electoral law is changed to reflect the court’s ruling. If Renzi can maintain the backing of his party, he will probably then lead the PD into the next elections.

thank you for very interesting video

Davit , You are very welcome. I would like to share with you and any interested parties the REAL ISSUE concerning the UNFREE Markets and the following as explained in this excellent article about the present economic system the world economists follow and what is taught in universities around the world.

https://www.theguardian.com/business...-from-the-dead

Snippet: Keynes died 70 years ago. We ignore his wisdom at our peril
Justin Talbot Zorn and Merle Lefkoff

The economist warned against the potentially disastrous weaknesses of our global financial system. It’s not too late to pay him heed now


Keynes discovers that governments deviate from his ideas. Instead of running budget surpluses in the good times and deficits in the bad times, they run deficits all the time. They fail to draw the proper distinction between day-to-day spending and investment. In Britain, December 1976 was the pivotal moment. Matters came to a head in early December when a divided and fractious cabinet agreed that austerity was a price that had to be paid for a loan from the International Monetary Fund, which was needed to prop up the crashing pound.

Subsequently, Keynes is informed, there was a paradigm shift. Labour had been reluctant converts to monetarism; the Thatcherites who followed were true believers. Controls on capital were lifted, full employment was abandoned as the prime policy goal, trade union power was curbed, taxes for the better off were cut, inequality was allowed to widen, finance waxed as manufacturing waned.

You don’t need to go on, Keynes says, because I can tell you what happened next. Bashing organized labor and cutting government spending led to a dearth of effective demand that was papered over by cuts in interest rates. Cheaper money led to some increase in productive investment but this was overshadowed by speculation in the stock market and real estate. Eventually, the bubble burst and – just as in 1929 – there was a stupendous crash.

That explains why the headlines I can see from 2016 bear so much resemblance to those from 1936: high unemployment and a lack of growth that has bred deep public resentment. That explains the referendum results in the UK and Italy, the outcome of the US presidential election and the growing support for far-right parties in Germany and France.

Even so, Keynes is surprised to discover that the crash occurred, not in 2016 or 2015, but some eight years earlier. What’s been happening in the meantime, he asks?
The answer given is that initially central banks slashed official interest rates to levels never seen before. In the UK, borrowing costs were reduced to 0.5%, even lower than the trough of 2% reached after the pound came off the Gold Standard in 1931.

But that was not all. Central banks also bought bonds from private institutions, with the aim of increasing the supply of money and reducing market – or so-called long-term – interest rates. Both initiatives meet with Keynes’s approval. His works advised the use of aggressive monetary policy because lower interest rates should help to stimulate higher private sector investment, because in most cases this is what lifts economies out of recession.

But, he adds, if this was a really serious slump then monetary policy might not have been enough on its own. In certain circumstances, it doesn’t really matter how low interest rates go – private companies feel so uncertain about the future they are reluctant to invest. People hoard cash rather than spend it. Monetary policy becomes like the drug soma in my friend Aldous Huxley’s book Brave New World – it calms people down and disguises the fact that something untoward is happening.
Analysis Keynes helped us through the crisis – but he's still out of favor.

NOW let me introduce you in case you are not aware to the Austrian School of Economics.

https://mises.org/about-mises/what-austrian-economics

Snippet:

The result of Mises's research was The Theory of Money and Credit, published in 1912. He spelled out how the theory of marginal utility applies to money, and laid out his "regression theorem," showing that money not only originates in the market, but must always do so. Drawing on the British Currency School, Knut Wicksell's theory of interest rates, and Böhm-Bawerk's theory of the structure of production, Mises presented the broad outline of the Austrian theory of the business cycle. A year later, Mises was appointed to the faculty of the University of Vienna, and Böhm-Bawerk's seminar spent a full two semesters debating Mises's book.

Mises's career was interrupted for four years by World War I. He spent three of those years as an artillery officer, and one as a staff officer in economic intelligence. At war's end, he published Nation, State, and Economy (1919), arguing on behalf of the economic and cultural freedoms of minorities in the now-shattered empire, and spelling out a theory of the economics of war. Meanwhile, Mises's monetary theory received attention in the U.S. through the work of Benjamin M. Anderson, Jr., an economist at Chase National Bank. (Mises's book was panned by John Maynard Keynes, who later admitted he could not read German.)

In the political chaos after the war, the main theoretician of the now-socialist Austrian government was Marxist Otto Bauer. Knowing Bauer from the Böhm-Bawerk seminar, Mises explained economics to him night after night, eventually convincing him to back away from Bolshevik-style policies. The Austrian socialists never forgave Mises for this, waging war against him in academic politics and successfully preventing him from getting a paid professorship at the university.
Undeterred, Mises turned to the problem of socialism itself, writing a blockbuster essay in 1921, which he turned into the book Socialism over the next two years. Socialism permits no private property or exchange in capital goods, and thus no way for resources to find their most highly valued use. Socialism, Mises predicted, would result in utter chaos and the end of civilization.

Mises challenged the socialists to explain, in economic terms, precisely how their system would work, a task which the socialists had heretofore avoided. The debate between the Austrians and the socialists continued for the next decade and beyond, and, until the collapse of world socialism in 1989, academics had long thought that the debate was resolved in favor of the socialists.

Meanwhile, Mises's arguments on behalf of the free market attracted a group of converts from the socialist cause, including Hayek, Wilhelm Röpke, and Lionel Robbins. Mises began holding a private seminar in his offices at the Chamber of Commerce that was attended by Fritz Machlup, Oskar Morgenstern, Gottfried von Haberler, Alfred Schutz, Richard von Strigl, Eric Voegelin, Paul Rosenstein-Rodan, and many other intellectuals from all over Europe.
Also during the 1920s and 30s, Mises was battling on two other academic fronts. He delivered the decisive blow to the German Historical School with a series of essays in defense of the deductive method in economics, which he would later call praxeology or the logic of action. He also founded the Austrian Institute for Business Cycle Research, and put his student Hayek in charge of it.

During these years, Hayek and Mises authored many studies on the business cycle, warned of the danger of credit expansion, and predicted the coming currency crisis. This work was cited by the Nobel Prize committee in 1974 when Hayek received the award for economics. Working in England and America, Hayek later became a prime opponent of Keynesian economics with books on exchange rates, capital theory, and monetary reform. His popular book Road to Serfdom helped revive the classical liberal movement in America after the New Deal and World War II. And his series Law, Legislation, and Liberty elaborated on the Late Scholastic approach to law, and applied it to criticize egalitarianism and nostrums like social justice.

In the late 1930s, after suffering from the worldwide depression, Austria was threatened by a Nazi takeover. Hayek had already left for London in 1931 at Mises's urging, and in 1934, Mises himself moved to Geneva to teach and write at the International Institute for Graduate Studies, later emigrating to the United States. Knowing Mises as the sworn enemy of national socialism, the Nazis confiscated Mises's papers from his apartment and hid them for the duration of the war. Ironically, it was Mises's ideas, filtered through the work of Roepke and the statesmanship of Ludwig Erhard, that led to Germany's postwar economic reforms and rebuilt the country. Then, in 1992, Austrian archivists discovered Mises's stolen Vienna papers in a reopened archive in Moscow.

While in Geneva, Mises's wrote his masterwork, Nationalokonomie, and, after coming to the United States, revised and expanded it into Human Action, which appeared in 1949. His student Murray N. Rothbard called it "Mises's greatest achievement and one of the finest products of the human mind in our century. It is economics made whole." The appearance of this work was the hinge of the whole history of the Austrian School, and it remains the economic treatise that defines the School. Even so, it was not well received in the economics profession, which had already made a decisive turn towards Keynesian.

Though Mises never held the paid academic post he deserved, he gathered students around him at New York University, just as he had in Vienna. Even before Mises emigrated, journalist Henry Hazlitt had become his most prominent champion, reviewing his books in the New York Times and Newsweek, and popularizing his ideas in such classics as Economics in One Lesson. Yet Hazlitt made his own contributions to the Austrian School. He wrote a line-by-line critique of Keynes's General Theory, defended the writings of Say, and restored him to a central place in Austrian macroeconomic theory. Hazlitt followed Mises's example of intransigent adherence to principle, and as a result was pushed out of four high-profile positions in the journalistic world.

Mises's New York seminar continued until two years before his death in 1973. During those years, Rothbard was his student. Indeed, Rothbard's Man, Economy, and State (1963) was patterned after Human Action, and in some areas—monopoly theory, utility and welfare, and the theory of the state—tightened and strengthened Mises's own views. Rothbard's approach to the Austrian School followed directly in the line of Late Scholastic thought by applying economic science within a framework of a natural-rights theory of property. What resulted was a full-fledged defense of a capitalistic and stateless social order, based on property and freedom of association and contract.

Rothbard followed his economic treatise with an investigation of the great depression, which applied Austrian business cycle theory to show that the stock market crash and economic downturn was attributable to a prior bank credit expansion. Then in a series of studies on government policy, he established the theoretical framework for examining the effects of all types of intervention in the market.

In his later years, Mises saw the beginnings of the revival of the Austrian School that dates from the appearance of Man, Economy, and State and continues to this day. It was Rothbard who firmly established the Austrian School and classical liberal doctrine in the U.S., especially with Conceived in Liberty, his four-volume history of colonial America and the secession from Britain. The reunion of natural-rights theory and the Austrian School came in his philosophical work, The Ethics of Liberty, all while he was writing a series of scholarly economic pieces gathered in the two-volume Logic of Action, published in Edward Elgar's "Economists of the Century" series.

These seminal works serve as the crucial link between the Mises-Hayek generation and the Austrians now working to expand the tradition. Indeed, without Rothbard's willingness to defy the intellectual trends of his time, progress in the Austrian School tradition might have come to a halt. As it was, his wide and deep scholarship, cheerful personality, encyclopedic knowledge, and optimistic outlook inspired countless students to turn their attention to the cause of liberty.

Though Austrians are now in a more prominent position than at any point since the 1930s, Rothbard, like Mises before him, was not well treated by academia. Although he held a chair in his later years at the University of Nevada, Las Vegas, he never taught in a capacity that permitted him to direct dissertations. Nonetheless, he managed to recruit a large, active, and interdisciplinary following for the Austrian School.

The founding of the Mises Institute in 1982, with the aid of Margit von Mises as well as Hayek and Hazlitt, provided a range of new opportunities for both Rothbard and the Austrian School. Through a steady stream of academic conferences, instructional seminars, books, monographs, newsletters, studies, and even films, Rothbard and the Institute carried the Austrian School forward into the post-socialist age.

Larry Elliott Economics editor
A brief burst of Keynes prevented a 1930s-style collapse that might have led to a more fundamental rethink of the status quo


Keynes is told that ever bigger doses of monetary soma have been necessary to keep the global economy ticking over, with weak investment leading to poor productivity and growth rates well below those seen in the years leading up to the crisis. He asks the obvious question – if monetary policy has ceased to be effective, what have governments been doing to help?

Comments from Benjaminis: It is suggested that if you want to really understand the TRUTH of where we all are today in this Global connected financial world you start to educate yourself as your time permits on this economic school of thought. I will have more to add in a follow up post.