Money Flow Trading Method along with Risk Management

http://www.zerohedge.com/news/2016-1...rous-situation

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Submitted by Mac Slavo via SHTFPlan.com,

Doug Casey is the founder of Casey Research and well known for his forecasting prowess, having accurately called the crash of 2008 and many other trends over the last four decades. In his latest interview with Future Money Trends Casey explains what a Donald Trump Presidency will mean for financial markets, economic stimulus, and geo-politics. As he’s noted previously, 2008 was just the first part of the storm and we are rapidly approaching the trailing edge of the hurricane. This time around it’s going to last much longer and be much worse than what we experienced before.

In short, as Casey succinctly explains:
The one thing I feel very confident of is we’re going to have financial chaos in years to come and that’s going to drive people into gold and to a lesser degree into silver.

…

There’s absolutely no reason from fundamental point of view for bonds and stocks to be as high as they are right now… We’re in for a huge political, financial, demographic and military upset… these people might start World War III or seem like they’re trying to with the Russians… It’s a very dangerous situation.


(Watch At Youtube)

With Donald Trump set to take office in late January 2017, Casey believes his infrastructure initiatives will be a boon for the commodities industry:
I really believe him. I think that they’re going to push for doing lots of infrastructure in the U.S. and that’s going to take a lot of metals, so that’s a favorable short-term influence for metals… I can be talked into buying a copper or zinc or cobalt stock, but I want to stick with gold… and also uranium… I really think that the future of power generation is going to be in solar related things…. but at the present moment, by far the cheapest, the cleanest and the safest form of mass power generation is still nuclear… that’s exactly the opposite of what everybody is told… but especially if we have a de-regulated environment in the future, nuclear is going to do well… There are about 150 new nuclear plants under construction around the world… most of them in China and India… I’m very bullish on uranium… it’s selling below the cost of production.


But despite President Trump’s best efforts, says Casey, he won’t be able to stop the bloodbath coming in the bond market, a preview of which has been available for all to view in China, where the government halted trading last week following a record bond market crash.


People forget that the last peak in interest was between 1980-1982 when T-Bills were yielding over 16%… since then interest rates have been in a 35 year bear market going to below zero, which i thought was metaphysically impossible… So, interest rates are going to go up… Low interest rates and negative interest rates are actually destructive of capital and civilization because it discourages people from savings.

It doesn’t matter what these stupid governments do… interest rates are headed up… and I think they’re headed way up for a long time at this point… so if you own bonds sell them… hit the bid.

Ever the skeptic when it comes to information, disinformation and misinformation emanating from the mainstream media, Casey warns that the narratives being spun to divide Americans are dangerous to the stability of the nation and could lead to civil war:
It’s extremely serious.. The real fake news is what you hear on CNN, MSNBC, and even Fox… I don’t trust anything I hear… the mass media is basically the mouthpiece of the deep state… these people that have the money and have the power and basically treat the rest of the country as peons… they’re very dangerous… I actually think that the U.S. is on the ragged edge of a civil war… because the people that elected Trump are hated on a visceral level by the preachers that are around the Democratic Party and the Deep State, and that includes Republicans…

http://www.321gold.com/editorials/si...yst122416.html

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The Dollar Bull Overstays Its Welcome
Silver Analyst
Posted Dec 24, 2016

Back in March 2008, as the Credit Crunch was biting, the US Dollar, as measured by the US Dollar Index (USDX), was bottoming after a drop of over six years fuelled by the War on Terror. Silver had previously topped out at about $21 and was later to visit $50 as the dollar faced the abyss again just above the 70 level. To date, that level has been the all time low for the USDX.

(Click on images to enlarge)

http://www.321gold.com/editorials/si...22416/1_sm.gif

Looking at the 45 year chart for the USDX, it is clear the dollar has been on a downward trajectory interspersed with some rallies since 1985. As of 2008, the dollar has been in an 8 year rally. It is no coincidence that gold and silver have struggled during this time and precious metal investors will be wondering when the dollar will resume its 31 year bear?

While writing for subscribers on the US Dollar, another look at the USDX chart suggested that the dollar bull was beginning to outstay its welcome. Lines have been drawn between each high and low to highlight each dollar bull and bear.

http://www.321gold.com/editorials/si...22416/2_sm.gif

Let us tabulate these ups and downs below. As you can see, the USDX has experienced three bulls and three bears since 1971. What is interesting are the similarities in durations ranging from six year and four months to eight years and ten months. The average is 2798 days or seven years and eight months.
As this current dollar bull stands, it is now been on the go for eight years and eight months, which is one year above the average and two months off the longest ever bull. In other words, I would say this dollar bull is getting long in the tooth and will soon be replaced by a dollar bear which will run for an average of seven years and eight months.

What are the fundamentals of this cyclical prediction? I don’t know and I have no idea why the dollar should flit in and out of these 6-8 year cycles. But as for the next dollar bear, my bet is that a Trump administration is going to indulge in a dollar depreciation program that is not based on welfare or warfare, but rather heavy infrastructure spending which I shall call wall-fare in honour of that long structure he plans for the Mexican border.

Ladies and Gentleman - I am offline for the rest of the day and I leave everyone with a link to one of the most comprehensive and well researched articles that I have read in a very long time.

Enjoy your time with family and friends and if you need something to do then there is good reading material here.

http://ritholtz.com/2016/12/american...Big+Picture%29

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Are American Consumers Taking On Too Much Debt?
December 24, 2016 4:00pm by Barry Ritholtz

Are American Consumers Taking On Too Much Debt?
December 24, 2016 4:00pm by Barry Ritholtz
http://2oqz471sa19h3vbwa53m33yj.wpen...sumer-debt.jpg

http://www.wealthresearchgroup.com/wealthtransfer/

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The Greatest Wealth Transfer of All Times is Underway Right in Front of Our Eyes.
You Will Either Be Part of the 4% Who Becomes Wealthy
or Join the Masses
http://www.wealthresearchgroup.com/w...sons-cover.jpg
With $12,000,000,000,000 in negative interest-rate bonds, declining corporate profits for over a year, EuroZone crises, China slowing down and devaluing their currency, potential wars breaking out in the Middle East, and a mountain of debt at the U.S. federal level, Wealth Research Groups co-founder is sharing his personal Game Plan for 2016, allowing total transparency to what he is personally doing to profit from the chaos and protect from catastrophes.

It is about strengthening your own Financial Fortress.

This is the time to become astute, educated, and ready to act on opportunities and protect your life-long savings from immediate dangers.
The 4-Seasons Portfolio is for contrarians who would rather take action now than wait for the government to save them.
Download 4-Seasons Portfolio and Strengthen Your Financial Fortress NOW!

Defense Read Activity Disease if you haven’t already. 2016 is a good time to hold cash. Asset prices are expensive, and every once in a while, there will be great opportunities. While the market will correct, you will want to have “opportunity funds”; cash that is ready to be deployed. Inflation is a threat, but Wealth Research Group is watching all the indicators, and it doesn’t seem imminent at all. 4-Seasons: 20% in cash. Gold & Silver: There isn’t any better time-tested and proven way to protect from catastrophe than these metals. If you want to have insurance from money printing, understand that this real form of money cannot be printed, and furthermore, it is fully yours. The government has no claim over it. Think about it – even if your house is free & clear, if you don’t pay taxes on it, the government can foreclose on it. Gold & Silver coins are outside the system, and therefore a great way to protect you. Also, the metals are trending up especially in times of negative interest rates, which we are experiencing. Gold & Silver have been the world’s top performing asset for 2016 thus far. 4-Seasons: 7%-10% in physical metals.

Comments from Benjaminis: Merry Christmas and Happy New Year

http://www.marctomarket.com/2016/12/...technical.html

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While few will be trading in the week between Christmas and New Years, we thought it might be helpful to review the dollar's technical condition. We make two overall points.

First, although the dollar's rally strengthened and extended after the November US election, this leg up of the dollar's longer-term rally began at the end of Q3. The anticipation of new policies by the Trump Administration, part of the story, but other forces that were also impacting, such as the divergence of monetary policy. The US economy was approaching the Fed's targets, and the December hike was telegraphed in earnest starting in September (when we had thought a hike was likely).

The eurozone economy is expanding near trend, but the low price pressures meant that it was premature to expect the ECB to abandon its asset purchase operations. It is more difficult to assess BOJ monetary policy, which shifted toward targeting the 10-year yield. The BOJ appears to be buying fewer JGBs, so its balance sheet growth has slowed. Perhaps the significance will be better appreciated if the rise in US rates continues to exert a pull on Japanese bond yields.

Second, the technical readings are getting stretched and the technical indicators suggest a correction is in the offing. Thus far, where they have occurred, the dollar pullbacks have been shallow, and mostly shy of technical retracement targets. The dollar's rally has truly climbed a wall of worry. As they have for several weeks, many remain concerned that the market is getting ahead of itself. Trump, they say, will be unable to deliver the kind of fiscal stimulus the market expects. Also, they argue that the market is gone a long distance toward pricing in three Fed hikes next year. Investors who put much stock in the dot plots could be disappointed (again).

Nevertheless, the value of appreciating the technical condition of the market is that allows the quantification of the risk. It is far from perfect, to be sure, and admittedly, it is more an art than a science (though some would say the same about macroeconomics), but it can assist in risk (money) management.

Most broadly, the Dollar Index rose in four of last week's five sessions. It has risen seven of the past 10 sessions and 10 of the past 15. It has risen for three consecutive weeks, and in six of the past seven, and nine of the past 12 weeks. This could be a definition of an uptrend. Yet a yellow light is flashing, meaning that the market is likely to have a proper correction soon. The Slow Stochastics and MACDs are about to turn down.

What level would the Dollar Index have to break to suggest a correction is at hand? The 102.50 area is notable. It corresponds to recent lows and a 38.2% retracement of the rally since the Fed's hike. A break of that area could signal potential toward 101.00-101.50.

The euro did fall to new multiyear lows last week near $1.0350, but that seemed to be more a function of thin trading. Consolidative trading, even if choppy, characterized the euro's price action. It closed little changed on the week. A move above $1.0510 would likely signal that the consolidation is morphing into a correction. That level corresponds to a 38.2% retracement of the drop since the Fed's hike. Above there, the $1.0550-$1.0570 area beckons, but corrective potential extends toward as $1.0675.

The dollar broke down to JPY116.55 after finishing the previous week near JPY118, but it happened at the start of the week. And for the rest of the week, the greenback consolidated at higher levels, spending practically no time below JPY117.00. It appeared the dollar was tracing out some wedge of pennant formation, which is most often continuation patterns. However, our reading of the technical indicators suggests that maybe it is not a wedge but a gradual grind lower. The downtrend is clear. It comes in near JPY117.65 at the start of next week and JPY117.50. The technical indicators are consistent with a retest and possible break of JPY106.50. The next target is in the JPY105.25-JPY105.50, which corresponds to retracement objectives and congestion area from earlier this month.

Sterling fell each day last week. It was the worse performing major currency, losing 2% against the dollar. It has fallen in 12 of the past 15 sessions in this three-week slide that has taken it to its lowest level since early November. It has the feel of year-end related adjustments more than fundamentally driven, though the rate discount to the US is historically large. How it performs near $1.2200, which is the 61.8% retracement of the rally since the flash crash in early October. A break could send it back into the $1.2080 area. The technical indicators are not in agreement. The MACDs recently turned lower, but the Slow Stochastics are overextended to the downside. The RSI is tracking prices lower.

After sterling, the Australian and Canadian dollars were the poorest performers among the major currencies last week (-1.7% and -1.4% respectively). Although the unexpected contraction in Canada's October GDP (-0.3%) weighed on the Canadian dollar before the weekend, the Australian dollar fell more. Recall that among the currency futures; the Australian dollar was the only one (that we track) in which speculators were net long.

The Aussie has fallen in seven of the past eight sessions. It is down three consecutive weeks and eight of the past 12. Before the weekend it neared the May/June lows (~$0.7145). There weekly close below $0.7200 is important because it corresponds to the 61.8% retracement of this year's rally. A move above there would help to stabilize the tone, but the technical indicators suggest this is unlikely. The next downside target is found around $0.7065.

The US dollar has approached the 50% retracement of this year's drop against the Canadian dollar from multiyear highs in January. The retracement is found near CAD1.3575 and repulsed the greenback last month. It has a running start, with oil prices easing and the interest rate discount to the US widening. The technical indicators are consistent with a continued uptrend. The 61.8% retracement is near CAD1.3840, but before it gets there, the CAD1.3760 area may be important. It corresponds to the measuring objective of the earlier flag pattern.

The February light sweet crude oil futures contract was little changed last week. A break of the $52.00-$54.00 range is potentially important. The technical indicators are not generating strong signals. The rally spurred by the swing in market sentiment from OPEC is dead to it has re-established order appears to have run its course, and the market has reverted to watching US inventories. Technically, a break of the $50.80-$51.00 area, the neckline of a potential head and shoulders top, would warns of a more significant pullback.

US 10-year Treasury yields drifted lower last week. Yields slipped a few basis points at the start of the week and then went sideways in narrow ranges. Unable to push through 2.52%, but the high yield print generally slipping to 2.56%. The low on the March 17 10-year futures contract has been steadily but slowly climbing since December 15. Indeed before the weekend the futures contract returned to the closing level on December 14 when the Fed announced its hike with the median dot plot suggesting three hikes next year. That level 123-13 also corresponds to the 50% retracement from the December 14 high. The next retracement objective is 123-21. The technical indicators favor additional near-term gains.


The S&P 500 were virtually flat last week. Momentum has evaporated, but rather than correct lower, it is moving sideways. This may be serving to keep some nervous longs invested. A break of 2250 would be the first sign that the correction may have begun. Since November 4, the S&P 500 rallied 9.3% before the consolidation began. The Slow Stochastics rolled over first, and the MACDs are in the process of turning lower. The RSI is drifting lower. It is also unusually rich relative to its 200-day moving average. It has been more than two standard deviations (2~253) above its 200-day moving average since December 7.

I have gone through the first 5 pages of the Money Flow Method and Risk Management and I am now staring on page 6 of the 20 pages. I started this thread 22 days ago on December 3, 2016.

The information that I post now comes from post 105 dated December 12, 2016 of page 6 of this thread and is very important to read and understand since on January 1, 2017 there will be many MAJOR changes starting in the financial world. Please post here any questions or ideas that you have so we can continue our discussions and learning.

A deep distrust of the financial system.

From WWW.GATA.ORG

http://www.gata.org/node/17005

"The crisis got me thinking," the private educator said.
"It's not because (the banks) don't do a good job, but if everything is online there's no way it's foolproof compared to your wealth held in your own hands."
These are unsettling times.

A recession looms. Extremist parties are on the ascent globally.

One of the oldest banks in the world is on the brink of collapse in Italy.

A sense of unease is on the rise, but with it, Singapore's safe-haven status has soared.

As investors the world over seek refuge in precious metals, they need somewhere to put all of it, and that somewhere, for many of them, is Singapore.
Commercial vaults on the island have quietly begun to bulge with gold and silver.

Even as the price of gold rose 11 percent to about US$1,177 (S$1,685) an ounce this year, the amount of gold and silver stored with Malca-Amit in the city-state has jumped some 45 percent in tonnage in the past year.

The secured logistics company's three facilities in Singapore totalling 1,240 square meters are now about three-quarters full, said the managing director of Malca Amit Singapore, Ariel Kohelet.

At The Safe House, operated by precious metal dealer Silver Bullion, the amount of silver has soared by 130 percent, or 2.3 million tonnes, on an annualised basis from last year.

The amount of gold stored there has increased by half from last year, or 20,000 troy ounces, according to Gregor Gregersen, founder of Silver Bullion.
Independent secured storage companies like these two are making hay as investors, increasingly wary of the banking system, move their precious metal out of private banks.

Joshua Rotbart, who owns an eponymous business helping customers worldwide to buy, sell, store, and transport gold, silver, platinum, and palladium, said 70 percent of his clients want private storage solutions so they can have direct access to their precious metals.

"They don't want to be subject to the bank's regulations, or the government telling them yes, you can, or no, you cannot," he said.
"They want to be able to go to the vault and if needed, take it, or make sure it's there.
"It's a trust issue with the financial system."

Similarly, Gregersen sees increasingly more customers transferring existing precious metals from other vaults outside the country.
Some 90 percent of these customers are from the West, with half of them from the United States and the rest from Australia and Europe.
British customers are also increasing in number after Brexit, he said.

While Switzerland was a popular destination for precious metal storage in the past, many Swiss banks and vault operators stopped accepting individual American customers three to four years ago, because of an American law that attempts to curb tax evasion by its citizens.
Singapore and American banks, on the other hand, are more likely to take on U.S. customers.

Meanwhile, another common destination for the glittering metal, Hong Kong, has run up against its own set of challenges.
"Increasingly people are afraid that Hong Kong is ultimately under Chinese control and the 'one country, two systems' (governance framework) is becoming weaker," Gregersen explained.

Throw in the political unrest in the city and customers are becoming jittery enough to start transferring their precious metals from Hong Kong to Singapore.
"Every location for long-term storage is really losing its appeal for many of the customers," he said.

"Singapore is standing out as a jurisdiction that has been shown to be trustworthy and stable" and "slowly being recognised as the single best storage place for bullion."

While wealthy families from North America and Europe make up the bulk of those buying and storing physical gold and silver for investment purposes, the trend is starting to take off in Southeast Asia as well, Rotbart said.
Requests for large amounts of bullion, reaching as high as US$5 million (S$7.1 million) in one go, started trickling in last year, though he adds that such cases remain in the minority.

"The majority still buy and keep it in their house or office. And they buy as they go, when they have a child or anniversary," he said.
Southeast Asians have a history of investing in gemstones, so they are familiar with the concept of storing wealth in tangible assets such as gold.
Tan, who put nearly three-quarters of his liquid assets into gold and silver, said there are two ways to store bullion: either with Cisco's storage facility or at home in a safe or hiding spot.

"To steal bullion is not that easy because it's heavy," he said.

He stresses that if one is buying precious metals to avoid exposure to the banking sector, then one should not store them with the banks.
"Because if the banks go bust and get nationalized, everything within it will be taken away. It will not be yours."

But as companies such as Silver Bullion offer innovative services such as peer-to-peer lending backed by precious metals, Singapore-based investors are starting to bring their bullion out of their homes.

"We see customers who bring the gold from home ... especially silver, which is more bulky, because they want to get a loan for 3 percent," said Gregersen, who emphasizes that Silver Bullion ensures that investors have legal ownership of the precious metals stored with the company.

For investors who buy gold and silver bullion, a common concern is having legal ownership of the precious metal in storage, also known as allocated metal.
Under this system, investors normally have serial numbers or identification marks that tie the bars or coins to them, as opposed to un-allocated gold or silver that is the property of the bank or vault.

Like many others, So Kai Tong, a 53-year-old private investor, buys gold and silver as a form of insurance.
"You hope that you don't need to use it," he said.

If the gold price reaches US$10,000 (S$14,300) an ounce, "you know the rest of the world sucks already."

This information comes from post 107 of December 12, 2016 on page 6 of my thread.

It continues on with the subject of Gold which is not only a commodity, it is a currency and a store of wealth.

Benjaminis

http://www.gold-eagle.com/article/wh...d-heading-2017

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Strengths

 

1. The best performing precious metal this week was silver with a gain 0.76 percent. Electronic chat documents released by Deutsche Bank show that UBS and Deutsche Bank, along with others, regularly conspired trades with one another to trigger stop-loss orders, coining the name STOP BUSTERS for themselves, according to court documents. Plaintiffs contend that the records show these banks conspired to fix the spread on silver offered to customers and used illegal strategies to rig prices.
2. BullionVaults Gold Investor Index, which measures the balance of client buyers against sellers, jumped to its highest in five years, reports Bloomberg. The gauge of gold buying rose to 59.3 in November from 56.8 in October, while the silver gauge retreated.
3. Gold premiums in China soared to a three-year high following the news of reported gold import curbs in the country along with limited supply of the precious metal, reports ZeroHedge. The import curbs may be part of Chinas efforts to limit outflows of the yuan after the currencys slide to its weakest in more than eight weeks, the article continues. Coin sales from the U.S. Mint have also risen, for a fourth straight month in fact, following the U.S. election. The 2016 American Eagle gold coin in one-ounce, quarter-ounce and tenth-ounce sizes are sold out, reports Dave Harper with The Buzz.

Weaknesses

1. The worst performing precious metal this week was palladium, down 1.77 percent. Commerzbank AG believes that palladium, the best-performing precious metal in the second half of 2016, could be heading for a price correction early in the year, reports Bloomberg. Commerzbank also noted that gold, having the worst returns over this same period, could benefit from still-low interest rates and ultra-low monetary policy in 2017.
2. Platinum miners, on the other hand, are contending with a 50-percent drop in prices for the metal since 2011. In addition, Sibanye Gold has agreed to pay more than its market value for Stillwater Mining Co. for $2.2 billion, giving it charge of the worlds highest-grade deposit of PGMs, reports Bloomberg.
3. Exchange-traded funds backed by precious metals saw a net outflow of $6.24 billion over the past month, as gold prices tumbled to a 10-month low, reports Bloomberg. Overseas, China reported that its gold reserves remain unchanged in November from a month earlier, at 59.24 million troy ounces. According to Bloomberg, this marks only the second time the country has paused monthly buying after disclosing a 57 percent increase in holdings since 2009, as of June 2015.

Opportunities

1. According to a report from Credit Suisse, higher gold prices are needed for supply to meet demand growth. The total delineated gold reserves at current prices are unlikely to keep pace with demand over the long term, states the report. Operating mines have only around 1 billion ounces of reserves left, or around 10 years of mine life. In relation to the chart below, the Credit Suisse explains that significantly higher gold prices are likely needed to increase recycled gold supply above recent levels.

http://www.gold-eagle.com/sites/defa...es121216-a.png

1. New Shariah-compliant rules approved on November 19 for trading gold, now allow the precious metal to be accepted as an investment in Islamic finance. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) developed the standards with the help of the World Gold Council, which has said the new rules could spur demand for hundreds of tons of gold, reports Bloomberg. According to Mohd Daud Bakar, a Shariah scholar, the SPDR Gold Trust (the biggest bullion-backed ETF) will probably qualify, and the standard may open new demand to central banks.
2. London-based manager of the Old Mutual Gold & Silver Fund says that gold will strengthen as the Fed fails to increase interest rates fast enough to keep up with inflation. Commerzbank is also positive on the metal, forecasting it to climb next year each quarter to an average of $1,300 an ounce in the fourth quarter and extend its gains in 2018 to $1,400 an ounce by the third quarter of that year. The headwind from U.S. dollar appreciation and the rise of bond yields should abate, the bank says. Similarly, Citi says that mining companies are changing their behavior, which could lead to value creation in the coming years, reports Bloomberg.

1. Comments from Benjaminis: These are the facts as why the STATUS QUO changes in 2017. Please post your comments and questions so we can explore these very important matters further. 2017 will be the most important years of our life regardless if we trade Forex or do something else with our lives.
2. HAPPY NEW YEAR 2017

This information comes from post 114 of December 13, 2016 on page 6 of this thread.

Good Morning again Traders

I am going to post a series of links to important fundamental information from my research sources so you will have a better understanding of the important issues that affect my Money Flow Method and for education purposes.

Here is the link that I will start with. http://schiffgold.com/commentaries/make-money-great/

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The United States of America was founded on the principals of limited government and sound money. Today we have neither. The growth of the former has largely been a function of its ability to abolish the latter. A dollar was original defined as a specific weight of gold or silver, and the Constitution limited the power of the states to make anything other than gold or silver legal tender. As the Federal Government was given no power to make anything legal tender, and since the Federal Government only has those powers expressly granted to it by the Constitution, gold and silver are still the only Constitutional forms of money authorized in the United States.
http://1mo0o3e03f7c59k045fwasgbz.wpe...feat-Image.jpg
For years all commerce in the United States was transacted in either gold or silver, with smaller transaction completed using copper or nickel. Private banks issued notes backed by their gold and silver deposits, which also circulated as note currency, along with actual money. These money substitutes were often more convenient to use than money itself, especially for larger transactions.

Eventually the Federal Reserve was created with its notes replacing the various bank notes that had previously been in circulation. They were originally backed by, and redeemable in lawful money, dollars made of gold or silver. But that changed in 1971 when this connection was severed, leaving the notes backed solely by government debt and redeemable in nothing. Since then the purchasing power of Federal Reserve Notes has steadily declined.

Yet despite their obvious shortcomings, citizens continue to use Federal Reserve Notes rather than actual dollars made of gold or silver. Although the courts have declared that Federal Reserve Notes are legal tender (disregarding the Constitution in the process), and government requires that they be used to pay taxes, the main reasons that people have chosen to use the notes have been convenience and the ability to earn interest. Paying with paper, or accessing a bank deposit by check or debit card is much easier then lugging around a bunch of metal. And while gold bars stored in your basement earned no interest and could potentially be stolen, funds deposited in banks have been federally insured and traditionally paid significant interest.

But in recent years much of that has changed. All major U.S. banks are basically insolvent, and the government has insufficient reserves to bail any one of them out should it fail. In addition bank deposits pay zero interest, while inflation steadily erodes away purchasing power. In fact, while the Federal Reserves stated mission used to be the maintenance of price stability and the purchasing power of its notes, its current mission is to ensure that prices rise and that its notes lose value over time. Given how much value the notes have lost when the Feds goal was to preserve purchasing power, imagine how much faster value will erode now that depreciation is actually their stated objective!

http://schiffgold.com/videos/rickard...ing-recession/

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Economist and author Jim Rickards and former presidential contender Ron Paul appeared on RT television recently to discuss their 2017 economic and political predictions. Rickards laid out his idea of Trump’s administration forming a “cabinet government,” that might work to decentralize executive power, which has become more concentrated over the last 15 years. Paul looked to another inevitable US recession fueled by runaway inflation and the bursting of economic bubbles artificially propped up by failed monetary policies.

Here are the time codes for each interview: Jim Rickards: 6:17-11:02; Ron Paul: 13:24-21:30.
Rickards said he sees Trump’s cabinet selection process will be driven by a business mentality rather than promises made or past relationships. It’s a style of governing Rickards compares to past US administrations of the 1950s and 1960s or within other countries today like the UK, Australian, and Canada.
“What I expect is that Trump will name a strong cabinet…I think Trump will wear his CEO hat since he’s not a traditional politician but a CEO. Good CEOs are delegators. They hire good teams. They put them in charge of different divisions. If they do well, they get promoted. If they don’t do well, they may get fired … So we might see something like cabinet government instead of highly centralized power. I think it’s very healthy.”

Paul explains how economic bubbles in the bond, housing, and other markets have been expanded by the Fed’s monetary policies. Such bubbles will burst over-valued assets, leading to an “inevitable correction” by the market.

The former Texas Representative also points out an obvious, but often overlooked, part of quantitative easing and low interest rates: increasing the money supply can’t ensure that supply is allocated to the best ends. “The Fed can create money and credit,” Paul states, “But it can’t control where it goes. It goes in bonds, it goes in stocks, it goes in housing … it goes in different places.” One of the major downfalls of a monetary policy that stifles free market impulses is that it distorts investments by removing risk.

“The recession will come,” Paul says. “The conditions have already been established for the recession … Since it’s all artificial, with interest rates sending the wrong messages, there’ve been a lot of investments made and prices made that have been artificial … if it’s artificial, it sets the stage of the inevitable correction for the mistakes. They can’t prevent it … but all they can do is build up more debt and more mal-investment, which eventually makes the bursting of the bubble that much worse.”

http://schiffgold.com/key-gold-news/...ssion-deniers/

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Across the world this week, many different political strains were generating economic challenges. Venezuela is producing a cautionary tale about hyperinflation, while Italy began expressing its own populist movement. Meanwhile, the Fed has begun nervously testing the waters of the future Trump administration.
Venezuela Issuing 20,000 Bolivar Notes to Combat Worthless Currency

Venezuela’s Runaway Inflation is continuing to force policy makers to come up alternatives. One of the alternatives is the issuing of six new bills, which includes a new 20,000 bolivar. The super note will be worth 200 times more than the cash-heavy country’s current highest denomination.
<Venezuela’s inflation is expected to triple in 2017. Currently, 4,400 bolivars will get you one US dollar. There seems to be no end in sight for the free-fall currency, which is creating shortages in food and medicine.

http://1mo0o3e03f7c59k045fwasgbz.wpe...-up-friday.jpg
Trump Economic Advisor wants Fed to Get out of Economic Driver’s Seat
Judy Shelton, co-director of the Sound Money Project and Trump economic advisor wants the Fed to take a back seat to the economy, according to an interview with CNBC. Shelton said she thinks effective growth will come from increased productivity and tax reform, rather than the Fed’s failed monetary policies.
Markets seem to be buying into the game plan with asset prices continuing to climb, but there’s little thought being given to the effects of Trump’s planned fiscal stimulus, which would increase the deficit during an increase in interest rates. Still, Shelton doesn’t believe that the expected small rate hike next week will derail the rally.

5 Things to Watch for at the Fed’s December Meeting Next Week
As the December Fed meeting looms next week, the unanimous consensus is that we will have a new, higher rate at the end of it. But why the hike now? The main reasons could be the recent uptick in the markets, as well as investors’ positive outlook for Trump’s policies. Bloomberg columnist and chief economic advisor at Allianz SE Mohamed A. El-Erian created a useful article of the five key things to look for at the meeting.
Fed’s Recession Denial Making Them Nervous about Trump

The Fed may have backed the economy into the corner, but they still don’t see it. In a recent Fortune article, one Fed official stated “The economy is not in recession today,” despite mounting evidence to the contrary. The Fed is in denial of America’s addiction to easy credit and the bubbles their policies have created.

Peter Schiff put it best: “The problems haven’t been solved, and they can’t be solved unless we’re willing to bite the bullet and allow a painful economic restructuring that is going to be necessary for to pave the way for real economic growth.”

http://schiffgold.com/commentaries/c...pha-predicted/

Snippet:
This article was submitted by Shubhendu Pathak, a finance professional working in the Bay Area. Past: Capital One Shubhendu earned his Bachelors (B.Tech) and Masters (M.Tech) from IIT Delhi, and MBA with a concentration in Finance from Emory University.
Seeking Alpha published my two articles Will India Be The First Domino To Fall? and You Can’t Just Invest On Hope in which I predicted a currency crisis in India. On November 08, 2016, Prime Minister Narendra Modi announced the demonetization of 500 ($7.5) and 1,000 ($15) rupee notes, which constitute more than 85% of the currency in circulation. These notes ceased to exist as legal tenders on the night of the announcement. People can deposit them in their bank accounts before December 30, but cannot withdraw more than $350 in a week.
http://1mo0o3e03f7c59k045fwasgbz.wpe...471817-001.jpg

The purported object behind this step is to get rid of high denomination currency notes that the government believes are hoarded by tax evaders and corrupt government bureaucrats. This might be a little difficult to digest for an economist. For one, the corrupt might not be smart but they are not nave to simply sit on piles of cash that don’t yield any return; it doesn’t take a rocket scientist to diversify. Secondly, there is a simpler explanation that an economist might relate to better, and which is backed by data (read my two articles); the government run banks in India have run out of money and this is a bank holiday.

Here is an excerpt from my first article published on August 17, 2015.
The crisis has begun and there are only two ways forward for the banks; they can either take money printing to yet another level or announce a bank holiday and force the depositors to take a haircut on their deposits. The former route, although more harmful for the economy in the long run, is more likely to be the choice of the government as it will prefer to maintain the pretense of payment (via money printing) and not have social unrest in the short run.
What I did not anticipate back in 2015 was that the government will choose the latter route. What is happening in India is worse than a bank holiday. In a bank holiday, one at least gets to keep the cash he has. Under demonetization, people in India have been forced to deposit the cash they won’t be able to withdraw. The government has not clearly communicated when it will lift the cash withdrawal restriction and is encouraging people to use mobile banking instead.

Since my articles were published last year, assets under default in Indian banks have increased by about 100% to more than $98 billion dollars. This does not include loans that were recently restructured to make the bank balance sheets look good. It also does not include money lent to the government which it cannot pay back with legitimate means i.e. taxation; neither the socialist mindset of the government nor the worsening fiscal situation is promising.

https://lh3.googleusercontent.com/9T...Hq36qQS7d70=s0

One might wonder why the government needs all the cash when Prime Minister Modi promised minimum-government maximum-governance. The NDA government is no less socialist than the preceding UPA government. It needs the cash to fund centrally planned schemes such as MUDRA where the same government run banks, that are on the brink of collapse, are lending to sectors determined as high priority by bureaucrats sitting in Delhi. The seventh pay commission by the Ministry of Finance further increased the salaries of millions of government officials earlier this year.

Abolishing the planning commission, one of the first steps taken by the government that came to power in 2014, is proving to be merely symbolic. The government is unable to look beyond central planning and government control. Every scheme launched in the last two and half years, including Skill India, Clean India, Start Up India, Make In India, Jan Dhan Yojna, buying millions of LED bulbs, distributing LPG cylinders to the poor, has central planning written all over.

Banks run by the government control more than 75% of the market in India. These banks don’t have money to fund these populist schemes of the government and this is the reason they are confiscating cash from people, and in the process draining private investment, and further weakening the fundamentals of the economy.

Let us look at the latest numbers published by the Ministry of Finance on October 13, 2016. The gap between revenue and expenditures of center and state governments has continued to widen from $135 billion in 2015 to $140 billion in 2016.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/2.jpg
Interest payments, the biggest line item in expenditures, have increased by 11% from $88 billion in 2015 to $98 billion in 2016. None of the major expenditures including Pension and Retirement Benefits, Social Security and Welfare, Food Subsidy and Fertilizer Subsidy have gone down under the new government.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/3.jpg
The government’s reliance on indirect taxes has increased. When oil prices declined from $100 in 2014 to $30 in 2016, retail price of oil in India did not drop. The government simply started collecting more tax. That cushion is getting thinner now with the OPEC reaching a deal to cut production.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/5.jpg
This stage is set for another fiscal crisis for the government. This crisis will approach much faster now that the private investments have taken another severe hit. This time, the government will be forced to use money printing to deal with it, as not making good on its promises might not be politically feasible at the time.

To understand in detail and in layman’s terms how the toxic mix of socialist governments and nationalized banks in India has ruined the Indian economy in recent years, I would encourage you to read the following two articles Republic of Ghaziabad – Part I and Republic of Ghaziabad – Part II. I have written these articles for people who do not understand complex terminologies of economics.

Two Booster Rockets For Gold
India is the second largest consumer of gold. The majority of the precious metal transactions in India is bought with cash and demonetization has left the consumers cash-strapped. When people eventually get hold of their money in cash, they are more likely to buy gold, which cannot be made worthless overnight by the government with an announcement.

The second rocket is made in the US. The probability of a rate hike by the Federal Reserve in December currently stands at more than 90%. This has strengthened the dollar and further suppressed the price of gold. The fiscal situation of the US government is not hidden from anybody, and Donald Trump has already announced his plans of spending — big. China is continuing to dump the US.treasuries, and Japan, the second-largest foreign creditor, reduced its holding by 0.7% to $1.14 trillion in September alone. With tax cuts Donald Trump has promised, only a huge QE4 can finance the new government’s spending plans.

I believe that both these booster rockets might take the price of gold to a record high within one year. You may consider buying physical gold or mining stocks such as Goldcorp (NYSE:GG), Randgold (NASDAQ:GOLD) and Newmont Mining Corp (NYSE:NEM).
Further, Citibank (NYSE: C) has significant exposure to India. Shorting the bank might not be a bad option.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/4.jpg

Comments from Benjaminis: Today in my morning thoughts report, I discussed in a philosophical way the great complexities in our world however while my focus was on the financial world what happens there affects everything in our daily lives. The articles that I linked on this page give the details of many associated issues with great detail and insight. You do not need to understand all of it however by not being aware of it you lessen your chance of awareness that you will most likely not read about in the mainstream media. I am passing part of my day doing this important research since all the markets are on hold until we see the FED decision on rates tomorrow at 2:00 PM.

I hope for those that have the interest and can find the time to read and understand that these information sources broaden your education while trading Forex and of course whether you trade or not you should understand what the TRUTH is and prepare yourself for the future. The FUTURE starts tomorrow at 2:00 PM and from all the events following that.

This information comes from post 117 of December 13, 2016 on page 6 of my thread on Money Flow and Risk Management !!!

My congratulations go to DavidRP who is the first Forex Factory trader that has opened his FXCM UK Demo Account.

I have logged into his account since as requested he has emailed to [email protected] his User Login and Password.

I now have organized for DavidRP the 16 symbols that I use on the FXCM UK Demo trading platform. DavidRP now has $50,000 US Dollars to trade with. I will show here what the 16 symbols that are used and in the order that they are on the platform in blocks of 6 symbols.

EUR/USD EUR/JPY USD/JPY GBP/USD USD/CNH USD/CHF

EUR/CHF AUD/USD USD/CAD USDOLLAR XAU/USD XAG/USD

US30 NAS100 SPX500 COPPER UKOIL BUND

You can all see that by having these 16 pairs you have an excellent view of the Money Flow between Asset Classes.

Congratulations DavidRP

You are soon ready for your first Forex trades with Capital of $50,000 US Dollars.

http://www.wealthresearchgroup.com/w...Lior-Gantz.pdf



The Role of Gold and Silver as Money Gold and silver are money. Though there are many opinions as to why these particular metals are considered as such, it is an irrefutable fact that since the early civilizations began trading goods, the role gold and silver have played at ensuring fair prices and stable economics is immense.

People dont seem to get that without the use of precious metals, the ancient world couldn't have advanced and commerce would have been next to impossible between nations and across vast distances. Gold and silver are subconsciously accepted as money after over 2,000 years. We dont use them as money anymore in an active way, for the most part, and being out of sight is exactly why the masses dont realize what a huge challenge the global economy is facing without a gold standard of some sort. Our opportunity is right in front of us.

Its so obvious that we might miss it if we listen to mainstream conventional wisdom. We dont believe in being contrarian just for the sake of it, nor are we Gold Bugs or Perma-Bulls. WE ARE GETTING INTO GOLD AND SILVER because they only go parabolic when NIRP (Negative Interest Rate Policies) are in place.

The next few years will be paramount to our wealth accumulation. It is an opportunity we at WRG call playing catch-up. Gold and silver are the soundest form of money, and today they are even more than that. The concept I am about to share is the critical point that people who haven't studied history totally miss. Gold and silver are not ONLY money anymore.

Back when national currencies were backed by gold and people used silver as a medium of exchange for everyday commerce, the purchasing power of the currencies was stable. When paper money became widely used, the role of the metals remained the same, as the notes were redeemable and 100% backed by metals.

Today, all currencies are brought into existence as credit. That means they are nothing but debt. Gold and silver, then, are much more than money. They are chaos insurance against natural human behavior. People in general pay back their debts, but some always default. Governments certainly dont close debts as well as individuals do. Time and time again, they use taxation, inflation, and other forms of maneuvering to reduce debt burdens.

The entire world economy is debt-based, and the boat of debt is sailing towards uncharted waters. The key to remember is that NOBODY can navigate the boat, so when the storm hits, its going to be each crew member (you and I) for himself. The captain (governments) can only dream up solutions, but he has no proven way to steer the boat.

Politicians are people not miracle workers. The global debt load requires us to get the boat to the shore of gold and silver, since the boat has a shortage of them. Only they provide insurance from the breakdown of a system we have created over the past 100 years, which shifted the concept of MONEY TO CREDIT. We are reaching the end of this experiment. Thats why owning gold and silver isn't a matter of choice anymore, but of necessity. Any crew member should hold on to his ounces and never let go. This is why owning mining shares gets you access and ownership rights to the source of insurance. When the boat finally reaches shore, anyone with access to mining will be crowned as a millionaire in ounces.


This manual consists of 3 parts:

1. History of precious metals Educate yourself on the history of the metals and how important they are to humans throughout history. This will serve as a benchmark and increase your fortitude and knowledge, because logic isn’t always reflected in market prices, and it is precisely when the market is acting irrationally that your fears are put to the test.

The prices of both gold and silver fluctuate without cease, and only an educated investor can handle the pressure of managing his position correctly.

2. Inflation and deflation with regards to the performance of the metals In 2016, there are major economies operating under negative interest rate policies, zero interest rate policies, and low interest rate policies. Loans and debt, both governmental and private are incredibly high, and government entitlement programs are in danger of not meeting obligations, which creates the danger of social unrest. Every currency on the planet is fiat and is backed only by the power of the government to use taxation, and nearly every country uses a central bank and fractional reserve lending, which create credit cycles and default cycles.

By understanding exactly where we are and what the future scenarios for us can be, preparation becomes methodical and prospering turns possible.

3. Specific action steps This part is meant for the investor who understands the world he lives in and wants to help himself and his family thrive during the next coming years when major changes will take place around us. Capitalizing on opportunities is certainly possible for the investor who is ready and isn’t afraid. After reading the previous 2 parts, this 3rd part will present a viable plan of action for you.


History of Precious Metals The U.S. has had many encounters throughout its history where the dollar/gold relationship has been tested. The U.S. was under a classical gold standard for more than 100 years.

It didn’t suffer from any monetary booms and busts throughout that period. The real mess began with the inception of the Federal Reserve banking system in 1913.

Many books have been written about the secrecy revolving this institution. For the purposes of this report, we are focusing on its effect on gold. After the 1st World War, the classical gold standard was changed to a gold exchange ratio. That means that not all bank notes were redeemable, and a credit boom began, resulting in the Great Depression.

What the U.S. was able to avoid from the days of the Constitution was inflation and deflation. It was deep in turmoil, and executive orders that President Roosevelt issued resulted in the turning over of gold to the government in exchange for Federal Reserve notes. This was the great wealth transfer from the private sector to the government – gold for “lawful paper.”

This is why our notes say “Legal Tender.” After the 2nd World War, the Bretton Woods was formed. The U.S. dollar, which by that time became the most stable currency (since the U.S. mostly avoided war), had become the reserve currency of the now international monetary system.

The exchange ratio was fixed to $35 per ounce, and this system was in place until 1971. The U.S. had embarked on costly wars, and foreign governments didn’t believe the dollar was worth the gold backing it.

So in August of 1971, Nixon announced that the gold-backed currency will now be fiat. That means currency without backing, except for the fact that the only entity that is allowed to create it is the government or central bank. This one decision has made possible the biggest credit expansion of all time, and now, about 45 years later, we are going to experience the greatest credit contraction of all time, and all the credit is being returned to the creditors. That’s the main reason for these policies like QE, or Quantitative Easing. Without it, central bankers know that our currency supply will contract massively, leading to mass unemployment and deflation.


2016 Inflation and Deflation Inflation and deflation are simply the effects of credit expansion and contraction. The best explanation of this subject can be viewed here: www.economicprinciples.org Ray Dalio explains cycles. Ray runs the largest hedge fund in history, and is by far the smartest investor of our era. It is our conclusion that we now stand at the perfect storm, because the credit contraction of 2008 didn’t come to its full cycle closure. The newly formed debt the U.S. government took on -- along with negative interest rates -- make this period the most favorable for precious metals in U.S. history. We will either have to go through another deflationary spiral or hyperinflation. No matter what and when it happens, this environment is fertile ground for the metals to protect and enrich their owners. This brings us to what we can do about the unavoidable.


Comments from Benjaminis: EVERYONE reading this carefully NOW has an EDGE if you use this KNOWLEDGE.

Knowledge is Power only if you use it and act upon it. For myself knowing this then I can prepare for the changes in values of all the Asset Classes and watch as the MONEY FLOWS from one to another and what the change in one does to the other. This is why I have said that the MOST IMPORTANT FUNDAMENTAL FACTS are not the fundamentals themselves or the use only of technical indicators or supply and demand although they all help they cannot SET THE TREND so knowing the trend you have your EDGE. It is not all that difficult to understand.

Each day we ask ourselves , "Do We Have Risk On today or Risk Off" ? The answer to that question gives us the direction to start although a fundamental new FACT can change the direction in seconds such as a Brexit or a FED Rate hike or NFP or any number of daily facts, expected or unexpected.

Then we come to my associated topic , Risk Management. The strategy that I have developed over the last 5 years always works with the exception being the Forex Trader themselves. Unless you have the desire and the interest and the DISCIPLINE to control your FEAR and your Greed you will lose. Of course since the MARKET is always right 100% of the time, unless you have complete control of your EGO for sure you will wipe out your account.

That is why I have not developed too many bad trading habits because I learned my trade over three years only trading demo funds of $50,000 US.

When I started real Forex trading with real funds , I went out and raised $250,000 US from a number of clients and traded their funds using LPOA. (Limited Power of Attorney).

My first large account during October 2007 was for $100,000 US and in the first 35 days of my Forex trading for a Hong Kong corporation I earned for my client $19,000 Plus US Dollars. My performance fee was 20% of the Net Profits.

I traded through the Financial Meltdown of 2008 when EUR/USD after reaching an all time HIGH around 1.60 within months broke below 1.20 and I took major losses for this same client and that was the day during 2008 that I realized that as good a Forex trader that I was, unless I had a FOOLPROOF Risk Management Method this could and would happen to my clients in the FUTURE.

Now that cannot happen ever again as long as I maintain my DISCIPLINE and my desire to trade Forex and have fun.

I offer anyone here this opportunity to learn at no cost to you other than your time and effort. There are still 3 spaces available.

This information comes from post 117 of December 13, 2016 on page 6 of my thread on Money Flow and Risk Management !!!

My congratulations go to DavidRP who is the first Forex Factory trader that has opened his FXCM UK Demo Account.

I have logged into his account since as requested he has emailed to [email protected] his User Login and Password.

I now have organized for DavidRP the 16 symbols that I use on the FXCM UK Demo trading platform. DavidRP now has $50,000 US Dollars to trade with. I will show here what the 16 symbols that are used and in the order that they are on the platform in blocks of 6 symbols.

EUR/USD EUR/JPY USD/JPY GBP/USD USD/CNH USD/CHF

EUR/CHF AUD/USD USD/CAD USDOLLAR XAU/USD XAG/USD

US30 NAS100 SPX500 COPPER UKOIL BUND

You can all see that by having these 16 pairs you have an excellent view of the Money Flow between Asset Classes.

Congratulations DavidRP

You are soon ready for your first Forex trades with Capital of $50,000 US Dollars.




Benjaminis

From Finviz - Currency Link in Visual Form.

http://finviz.com/forex.ashx

Gold - 5 Minute Chart

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

Dow 30 (US30)

US30 - 5 Minute Chart

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

USD/JPY - 5 Minute Chart

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

Nice Chart !!!

http://www.forexfactory.com/attachme...6&d=1482700148

I would like to see a chart on US 30 to see the correlation !!!

I will use the one from Finviz !!!

http://finviz.com/forex_charts.ashx?p=d1&t=USDJPY

US30

http://finviz.com/futures_charts.ashx?p=d1&t=YM


Benjaminis

http://news.xinhuanet.com/english/20..._135914640.htm

Snippet:
China vows to balance financial risk control, economic growth in 2017 with new monetary policy


Source: Xinhua 2016-12-18 23:14:03


BEIJING, Dec. 18 (Xinhua) -- With its new monetary policy, China is aiming to control the growth of asset bubbles and financial risk in 2017, while ensuring the economy is on a path of stable and healthy growth, scholars and media have said.

The new monetary policy is eye-catching, Zhou Hao, an economist at Commerzbank AG in Singapore, was quoted as saying by Bloomberg.
It showed that "the Chinese authorities are seriously concerned about asset bubbles," Zhou said.


"The stance shows the government is trying to find a subtle balance between stabilizing growth and controlling asset bubbles," said Hong Hao, chief China strategist at BOCOM International.


"Monetary policy will be kept prudent and neutral, adapt to new changes in money supply ... and strive to smooth monetary policy transmission channels and improve mechanisms to help maintain liquidity basically stable," said a statement issued by the Chinese government on Friday.


The statement was issued after the Central Economic Work Conference, during which Chinese leaders and senior officials gathered to map out priorities for 2017.

Optimism over the growth outlook for 2017 has been increasing even as the People's Bank of China shifts toward selective tightening after more than a year of record-low interest rates, said Bloomberg.

Forecasts for full-year 2017 growth have climbed to 6.4 percent from 6.3 percent since September, a Bloomberg survey showed Friday.

With the U.S. central bank hiking interest rates on Wednesday, the yuan was at 6.9508 against the dollar, "down 0.32 percent from Thursday's fixing ... marking the lowest level since May 2008," said the AFP, quoting data from the Foreign Exchange Trade System.


Still, there is no need to fear that the yuan will plunge in the future, despite further depreciation pressure on the yuan.

China will keep the yuan basically stable at an equilibrium level in 2017, while improving the flexibility of exchange rates.

The new monetary policy may have certain limitations though, said China International Capital Corporation (CICC) economist Liu Liu.

China's room for further monetary policy easing will be limited as the Fed is expected to raise interest rates another one or two times next year, domestic monetary easing will exacerbate capital outflows, and house price surges in major cities will reduce the room for monetary easing, Liu said.

Earlier, a Standard Chartered Bank report predicted financial and monetary policy instruments available to the Chinese government would suffice to support China's growth in the coming years.
Editor: Mengjie
http://www.xinhuanet.com/english/sta...fanxiang13.gifhttp://www.xinhuanet.com/english/sta...fanxiang12.gifhttp://www.xinhuanet.com/english/sta...hoto_share.gif
Related News

https://www.dailyfx.com/forex/fundam...o-Traders.html

Snippet:
Talking Points:
- The Yuan’s reserve currency status will likely further increase its trading volume
- The trading band and open market hours for onshore Yuan rates could be extended as well
- China’s economic growth and risks in financial markets are main drivers for Yuan rates
To receive reports from this analyst,sign up for Renee Mu’ distribution list.
As of October 1st, the Chinese Yuan is officially included in the Special Drawing Right (SDR) basket, as the fifth primary reserve currency, with a weighting of 10.92%. The International Monetary Fund (IMF) announced the approval on November 30th, 2015, marking a milestone for the Chinese currency.
Central banks have already started to increase Yuan holdings as foreign reserves - on June 22nd, 2016, Singapore’s Monetary Authority announced it would include Yuan-denominated assets as part of its official foreign reserves. However, for traders and investors, the Yuan’s official reserve status could bring benefits in a different way.
https://media.dailyfx.com/illustrati...y_Chart_17.png
Data downloaded from the IMF; chart prepared by Renee Mu.
Trading Volume
One of the most important advantages brought by the Yuan’s inclusion into the SDR basket is that the currency is legitimized and recognized as a safe and stable store of wealth by the financial world. Subsequently, trading volume in the Yuan is likely to increase as well, as access to the economy and popularity of its assets rise.
Let’s take a look at the evolution of the Yuan’s use. According to the Bank for International Settlements (BIS), information for USD/CNY trades before 2010 is not available. The BIS states that USD/CNY turnover for the period prior to 2013 may be underestimated due to incomplete reporting of offshore trading in previous surveys.
https://media.dailyfx.com/illustrati..._Picture_2.png
The lack of data and accuracy before 2013 may be caused by one of two reasons: A) the trading volume of the USD/CNY before 2010 may be so low that there is no need to account for it. B) There might be a descent amount of trading in the USD/CNY, but without enough recognition of the pair, it was not measured.
Now with the approval of SDR inclusion, the Chinese Yuan has become more recognized by the global banking community. In 2016, the USD/CNY has taken up 3.8% of the total trades measured by the BIS, rising from 2.1% in 2013; the weighting has exceeded that of the USD/CHF which is 3.5% in 2016.
The Yuan’s role in global payments and settlements has been rising as well. According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the Yuan’s ranking for international payments has been increasing quickly: the Chinese currency has overtaken 6 currencies over the past three years. The most recent report from the SWIFT shows that the Chinese Yuan accounted for 1.86% of global payments in August; ranking it fifth after the U.S. Dollar, the Euro, the British Pound and the Japanese Yen - the other four currencies included in the SDR basket.
https://media.dailyfx.com/illustrati...y_Chart_10.png
Data downloaded from Bloomberg; chart prepared by Renee Mu.
A report from Google Trends adds more evidence to the increasing popularity in the Dollar/Yuan exchange rate. The leading search engine evaluates how often a particular term is searched by worldwide users and gives it a rating from 0 (lowest) to 100 (highest). In the following chart, the search volume for ‘GBP to USD’ (same for ‘USD to GBP’) in May 2016 is set as the highest level and given a score of 100; this is likely driven by heated discussions before the Brexit referendum. Compare to the highest search volume, the amount of global users looking into ‘USD to CNY’ (same for ‘CNY’ to ‘USD’) was extremely low before 2010, and therefore was given a score of 0.
From the middle of 2010, the search volume for ‘USD to CNY’ started to pick up and has been gradually increasing over the following four years. Although the popularity in the USD/CNY is still relatively low compared to the established ‘major pairs’ - such as EUR/USD or GBP/USD - it has gained quickly.
https://media.dailyfx.com/illustrati...y_Chart_27.png
Data downloaded from Google; chart prepared by Renee Mu.
For traders, the increase in trading volume for Yuan pairs is good news. To learn about the various names of the Chinese currency and differences between onshore and offshore Yuan rates, read All About The Yuan.
Trading Band and Hours
The Chinese currency is not yet ‘free floating’. Onshore Yuan pairs are allowed to move within a certain range, determined by China’s Central Bank. The current trading band is 2% above or below Yuan’s reference rate, which is set by the Central Bank on a daily basis. For traders, the trend of the trading band may be more important than the level itself.
We can see from the chat below, it took 13 years for Yuan’s trading band to increase by +0.2% to 0.5% in 2007. However, it more recently only took 2 years for the band to increase by +1.0% to 2.0% in 2014. Both the frequency and degree of changes in the trading band have increased significantly. We may see additional expansion in the trading band driven by the momentum of the Yuan’s rise.
https://media.dailyfx.com/illustrati...y_Chart_32.png
Data downloaded from The People’s Bank of China; chart prepared by Renee Mu.
A larger trading band means a higher level of maximum volatility. Traders will want to keep in mind that greater volatility may bring larger risks of loss as well as higher potential returns.
In addition to the broadening trading band, trading hours for Yuan rates have also been extended. Beginning on January 4th, 2016, China’s Central Bank has expandedthe onshore Yuan’s trading by additional seven hours, in the effort of facilitating traders in European and American time zones.
Be Aware of Major Themes in China When Trade the Yuan
China’s economic growth and risks to its financial markets are primary drivers for the Yuan rates from a fundamental point of view. In terms of technical analysis, read our Sr. Technical Strategist Jamie Saettele’s weekly forecast for the USD/CNH pair.
The Economic Slowdown
The health of a country’s economy lays the foundation for its currency and affects the currency’s long-term trend. For the Chinese Yuan, as it was linked to the U.S. Dollar to varying degrees before August 11th, 2015, Yuan rates may not fully reflect the real condition of the Chinese economy.
After being de-pegged, the Yuan exchange rate garnered greater flexibility and thus may better reflect the real economy. China’s growth has dropped to 6.7% in 2016 from 12.2% in the first quarter of 2010, a post-financial-crisis high.
https://media.dailyfx.com/illustrati...y_Chart_41.png
Data downloaded from Bloomberg; chart prepared by Renee Mu.
In terms of the outlook for the economy, China’s policy leaders said that ‘the trend in the current and following periods is L-shaped, rather than U-Shaped’. In specific, the economy will likely reach the bottom within one or two years and then stay there for quite a significant amount of time before pickingback up again. This doesn’t mean that Yuan rates may not rise in the short or medium-term, driven by various internal and external factors; yet, in a longer time frame, the slowing economy may provide limited support to the currency.
The Risk of Housing Price Bubbles
China’s economic policy is one of the key drivers to Yuan rates. Currently, the country employs moderate monetary policy and proactive fiscal policy; this will likely continue to be the case amid the increasing risk of price bubbles and a lack of investment opportunities in the private sector.
The New Yuan Loans prints for July and August show that a majority of new credit issued has flown into the real estate sector. At the same time, a large amount of companies and individuals hold excessive cash on their hand as they are short onother investment opportunities. This indicates that home purchasers and real estate developers are the main group that want to borrow and spend in China. Within such a context, additional easing measures are less likely to generate diversified investment or business expansion, but more likely to fuel bubbles in the housing sector.
With low odds of the PBoC cutting rates in the near term, the Yuan may bear less devaluation pressure from home. The Chinese government is aware of the risk of price bubbles in the real estate sector and the shortage of viable investments; regulators have been working on these issues through efforts like promotingPublic-Private-Partnership projects. As individuals and companies become more willing to invest in a broader scope, the PBoC may then shift the tone on monetary policy. China’s daily news will cover these developments and help DailyFX readers to catch early signals that may hint at changes in monetary policy.
Other Ongoing Themes in China
There are other major ongoing themes worth keeping an eye on:
China is implementing major productions cuts in the manufacturing industry -one of the five goals for 2016- and Chinese manufacturing firms are facing challenges to meet the target by the end of the year.
Defaults in Chinese state-owned-enterprises (SOEs) have been increasing significantly in 2016. In May, energy firms started to miss payments on their debts. By August, the default risk has spread around Northeast China. One of the major solutions to help SOEs reduce debt is to swap debt into equities: after long discussions on the eligibility of participating firms, regulators finally approved the first deal for a SOE in September.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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1. Related Articles
2. Previous Articles From Special Report

1. Dec 23, 7:00 pm EST DAX, Nikkei, S&P 500 Roll in Q4; Valuations Warrant Caution if Chasing
2. Dec 23, 7:00 pm EST Dollar Draws on Many Sources to Extend 14-Year High
3. Dec 23, 7:00 pm EST Japanese Yen Poised to Gain Further For Three Key Reasons
4. Dec 23, 7:00 pm EST The Real Power of OPEC Will Be Revealed in Q1 2017
5. Dec 23, 7:00 pm EST Market Forecast - 1Q

https://www.dailyfx.com/forex/fundam...itle-Page.html

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A raft of failures plagued forecasters in 2016. The markets did not to foresee Donald Trump’s victory in the US presidential election, the last-minute OPEC production cut accord, and the outcome of the Brexit referendum. Prices gyrated wildly as investors repositioned after each tectonic shock. This breakneck volatility may yet prove to have been but a warm-up for fireworks on a far grander scale however as last year’s surprises become reality in the first quarter of 2017.


US Dollar Q1 2017 Forecast - Dollar Draws on Many Sources to Extend 14-Year High
After nearly two years of consolidation, the Dollar (ICE Index) was finally driven to a critical bullish breakout in the final months of 2016.
Euro Q1 2017 Forecast - EUR/USD Enters 2017 Positioned for More Downside
After a quiet start to the year, we were hoping for a more exciting last few months of 2016. Sure enough, Q4’16 ended with a ‘bang.’
British Pound Q1 2017 Forecast - Pound to Chart Disparate Path vs. Major Currencies in Early 2017
Much of what happens to the British Pound in 2017 will depend on implementation of the outcome of the Brexit referendum.
Japanese Yen Q1 2017 Forecast - Japanese Yen Poised to Gain Further For Three Key Reasons
The Japanese Yen heads into the end of 2016 trading near multi-year highs versus the US Dollar, and economic developments suggest the JPY may finally break the ¥100 level before the year is through.
Gold Q1 2017 Forecast - Gold Weakness to Subside With Fed on Hold in First-Half of 2017
Rising U.S. interest rate expectations may continue to drag on gold prices as the Federal Reserve appears to be on course to further normalize monetary policy in 2017, but Chair Janet Yellen and Co. may largely endorse a wait-and-see approach over the coming months as the central bank ‘assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation.’
Oil Q1 2017 Forecast - The Real Power of OPEC Will Be Revealed in Q1 2017
For traders who like to simplify the markets to a game of supply vs. demand, the Oil market in Q1 2017 should be their World Cup.
Equities Q1 2017 Forecast - DAX, Nikkei, S&P 500 Roll in Q4; Valuations Warrant Caution if Chasing
As we move into 2017, equities have been driven-higher with the euphoric hope of the congruent alignment of both fiscal and monetary policies from the United States.

Our strategy was first to own the physical metals. This allows you to own a hard asset that is the oldest and most widespread form of money. Now, we are going own businesses – stocks. In deflation, there is less credit in the economy, and this creates a contraction of currency supply. This environment creates turmoil by reducing personal income, lower prices, unemployment rises, and this is favorable basically only to companies that benefit from lower prices.

Mining is one the most capital intensive businesses in the world, and energy is its major expense. Oil to run the machinery is the single biggest factor of expenses, and in a deflation, oil prices are low -- even lower than today -- while the price of precious metals tend to stay quite stable. This creates wider margins of profit, and these mining companies flourish. We will stick to the best management teams and the most proven geologists. By owning stocks, we are opening ourselves up to the world of resource investing, which has created many multi-millionaires, and even billionaires.

http://www.wealthresearchgroup.com/w...Lior-Gantz.pdf

That is it for awhile as we move to the open of the markets in certain parts of the world.

http://finviz.com/news.ashx

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

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As MacLean's Jason Kirby points out, the Bank has taken to YouTube to warn Canadians about the dangers of too much debt and unrealistic house price expectations. He wonders, however, whether anyone will listen as one after another real estate bubble form in Canada, a nation whose household debt ratio has never been higher.

http://www.zerohedge.com/sites/defau...-2016-q2_0.png
As BMO pointed out, when the latest household debt ratio data was released, the upward trend in household debt goes back for the 26 years for which it has records and is showing no signs of slowing down.

"While it looks as though the Vancouver housing market is cooling after the foreign buyers' tax was implemented, the Toronto market remains very strong, and others are showing signs of improving as well," said BMO senior economist Benjamin Reitzes.

Meanwhile, none other than Canada's central bank has ramped up its warnings about heavily indebted households and the unreasonable expectations driving the housing market, yet all indications are that Canadians have stuffed cotton in their ears.

In Toronto, for instance, house prices are up nearly 15 per cent since the summer when Bank of Canada governor Stephen Poloz warned that price gains in the city were “difficult to match up with any definition of fundamentals that you could point to.” In the more than 15 years that the Teranet-National Bank House Price Index has tracked property prices in the city, there’s never been a six-month period when prices rose that fast. Meanwhile, the latest figures released by Statistics Canada showed the household debt-to-income ratio broke yet another record in the third quarter.


Now Canada’s central bank is trying a different platform to get its message across: YouTube.
In a video posted Monday on YouTube, in conjunction with the release of the Bank’s semi-annual financial system review last Thursday, Bank of Canada senior policy adviser Joshua Slive sketches out how Canada’s dangerous brew of debt and inflated house prices could combine to devastate the economy.
Here’s the scenario that worries the Bank.


1. As the Bank has pointed out already, households are highly indebted and house prices are rising at an unsustainable rate, though as Slive observes, people can often cope with these vulnerabilities for an extended period.
http://www.zerohedge.com/sites/defau...-768x419_0.png
2. That is, until an economic shock triggers a negative chain of events. For instance, a severe recession would lead to “a sharp increase” in unemployment.
http://www.zerohedge.com/sites/defau...-768x420_0.png
3. A lot of households, especially those carrying the heaviest debt loads, would have trouble meeting their debt payments. As a result, some households would start to default on their loans, and in turn, banks and trust companies would foreclose and try to sell those houses.
http://www.zerohedge.com/sites/defau...-768x418_0.png
4. At the same time, with the economy slowing, new buyers would delay house purchases until the economy improved. Given the challenges already facing the economy, this could “cause a large drop in house prices.”
http://www.zerohedge.com/sites/defau...-768x424_0.png
5. If house prices fell, it would push down household wealth, which has received a huge boost from the housing boom, and that could curtail consumer spending, which itself has become a primary driver of growth. The added stress on the financial sector would also weigh on the economy as lenders cut back on making new loans. Slive doesn’t use the term, but what he’s talking about is a credit crunch.
http://www.zerohedge.com/sites/defau...-768x420_0.png
There is good news, Slive says. Stress tests show Canada’s big banks will be just fine even with a large drop in house prices (stress tests also showed that both Belgian Dexia and Spanish Bankia were perfectly solvent just months prior to their respectively failrues). It’s also important to note that the Bank, in its financial system review, said there is a “low probability” of a sharp correction in house prices. But there’s no getting around the immense damage such a scenario would have on the economy.


The video is a break from regular fare on the Bank of Canada’s YouTube channel, which is largely made up of speeches by top Bank officials. And even if Slive’s delivery is trademark central-banker dry, the message is stark, and shows the Bank is desperate for Canadians to heed its warnings on debt and rising house prices.

If there’s one quibble to be made, it’s with the initial domino that the Bank sees setting everything in motion—a severe recession leading to job losses. Since the U.S. housing bubble popped and that country went into its long, dark funk, a chicken-versus-egg debate has raged over whether the housing collapse triggered the U.S. recession, or whether something else, like soaring oil prices, brought on the recession and turned the housing slowdown into a total collapse. What’s beyond debate is that America’s housing market reached its frothiest in mid-2006, and then began its decline, one-and-a-half years before the recession began.


Whatever the case, the Bank’s video should be another wake-up call for Canadians, but "not that anyone’s listening" as Jason Kirby laments.
Here’s the video in full.

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



Benjaminis

http://www.reuters.com/article/us-ch...-idUSKBN14E0DC

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China needs to keep financial market liquidity stable and regulate its "money gates" to prevent asset bubbles, but it also needs to ensure a lack of liquidity doesn't cause financial stress, according to a commentary in a newspaper owned by the People's Bank of China.

Chinese policymakers face a dilemma as they need to tighten credit to contain debt and speculative investment without triggering a wave of defaults that could destabilize the financial system.

The country's leaders have called for a "prudent and neutral" monetary policy in 2017 and for prevention of financial risk, while keeping the economy on a path of stable and healthy growth, according to statements following a key economic meeting this month.


Monetary policy needs to support economic growth and ensure enough liquidity in the interbank market, but also needs to target price stability and pay attention to asset bubbles, Financial News said in the commentary on Saturday.

Policies should also be more targeted, the commentary said.

"Maintain macroeconomic stabilization policies, strengthen fine-tuning (of policies), but do not implement big stimulus," the commentary said, but "explore more targeted ways to solve structural problems."

The People's Bank of China has not cut interest rates in 14 months, and as the economy has proved relatively resilient, the central bank has been guiding money market rates steadily higher in an effort to root out speculators.
Also In Business News

But tighter liquidity has led to stress in money markets in recent weeks as bonds fell and interbank rates spiked, with markets not calmed until the central bank made a significant liquidity injection.

http://www.businessinsider.com/natur...he-fed-2016-12


There's a lot of talk these days about the so-called neutral (or natural or terminal) interest rate projections of the Federal Reserve. In fact, their projection of this number is a key argument in their ongoing decision to keep rates at historically very low levels for what has been an extended period of time. (Specifically, Federal Reserve officials have argued that the neutral interest rate has sharply declined in recent years, meaning that apparently ultra-low interest rates really do not signify easy monetary policy.)


What is this neutral rate? The neutral rate is simply the federal funds rate at which the economy is in equilibrium or balance. If the federal funds rate were at this mysterious neutral rate level, monetary policy would be neither loose nor tight, and the economy neither too hot nor too cold, but rather just chugging along at its long-run optimal potential. The underlying theory is that loose monetary policywhere the Feds policy rate is set below the neutral rate can temporarily stimulate the economy, but only by causing price inflation that exceeds the Feds desired target (which, by the way, eventually causes overheating and a crash). On the other hand, if the Fed is too tight and sets the policy rate above the neutral rate, then unemployment creeps higher than desired and price inflation comes in below target.


In short, the neutral interest rate is one where the central bank is not itself distorting the economy. Monetary policy would really be nonexistent, as the Fed would not be altering the interest rate resulting from a free market discovery process between borrowers and savers. (This of course raises the question, why do central planners need to fabricate something that would naturally exist in their absence?) This is near where Yellen actually thinks we are these days, hence she sees little urgency in raising rates and thus lessening what, on the face of it, looks like a very loose current monetary policy.

Much of this neutral rate talk at the Fed is supposedly supported by the work of Swedish economist Knut Wicksell (1851-1926), who argued that the natural interest rate would express the exchange rate of present for future goods in a barter economy. If in practice the banks actually charged an interest rate below this natural rate, Wicksell argued that commodity prices would rise, whereas if the banks in practice charged an interest rate above the natural one, then commodity prices would fall. But thats where Wickselloften associated with the free-market Austrian School of economicswould cease to recognize his own ideas in current central bank thinking. Wicksells natural rate was a freely discovered market price in an economy, which reflected the implicit (real) rate of return on capital investments. For Wicksell, the natural interest rate was not a policy lever to be manipulated, in order to hit some employment or output goal. Yellen and the other Fed economists writing on this topic have conveniently (and probably unwittingly) co-opted Wicksell into their own Keynesian (and exceedingly un-Austrian) framework.

Thats the theoretical explanation of the neutral or natural rate. From a more practical standpoint, one must ask: How do we even know what that neutral rate is? The neutral rate is, by its current definition, inherently unobservable, as there is no discovery process in short term interest rates (and there hasn't been for as long as any of us have been around). Central banks calculate the neutral rate based on their formulas and identifying assumptions about output gaps and what interest rates, according to those models, will close those gaps. Here we have an immense circularity problem: Policymakers think they know the neutral rate because the assumptions of their interventionist model that they impose on the data say so, not because they have any insight that the market would actually clear at that rate, sans intervention. There is an underlying assumption that markets, left on their own, are wrong, while our model is right. Moreover, they are using observable data as model inputs that are the result of interventions that are already in effect. There are no controlled experiments in economics. Only market participants, acting freely in borrowing and lending at whatever interest rates make sense for that borrowing and lending, can ever discover what the neutral rate should be.


(To give a specific example: One of the key alleged pieces of evidence that the neutral rate has fallen in recent years is the sluggish growth of productivity. But suppose the ZIRP of the Fed itself has been choking off real savings and distorting credit allocation among deserving borrowers, and hence has crippled sustainable growth in output? In this case, the Fed models would conclude, Nope, our policy rate hasnt been too low, look at the weak productivity growth, confusing cause and effect.)

In fact, the circular logic is such that economists are far from an agreement on the current calculation, and their admitted model estimation errors are enormous. Contrary to Yellens recent monetary policy ruminations, reputable estimates using two different approaches have concluded that the Fed has set policy rates below the neutral rate since 2009.

(Things get worse. Its not merely that we cant know in real-time what the neutral rate is; we cant even know after the fact. Suppose the Fed gradually hikes rates, and then the economy crashes. Dovish Keynesians would no doubt say, We told you not to tighten! The neutral rate was obviously lower than the Fed realized, and they just raised the policy rate above it. But this isnt necessarily so. It could be that the policy rate had been below the neutral rate for years, fostering a giant asset bubble which eventually had to collapse. Both theories are consistent with the observed outcome of modest rate hikes leading to a crash.)

The great Austrian economist Friedrich Hayek stressed the role of market prices in communicating information to firms and households, and the impossibility that central planners can ever effectively calculate those prices. If the Feds economists think they are able to estimate what the neutral interest rate is, then we can dispense with prices altogether. The Feds economists can estimate the neutral wage rates for various types of labor, the neutral commodity prices for various inputs, and so forth, and issue comprehensive plans for the economy, all calculated in kind.

Of course, this is absurd. The point is, in a capitalist economy, the interest rates themselvesas determined in a competitive discovery process in the bond and credit markets are central to the coordination of the economy. To assume experts at the Fed could determine the proper, optimal interest rate, without that discovery process, is to assume away the real-world information problems that we all can agree market prices solve. Indeed, perhaps this is why our economic problems persist?

Mark Spitznagel is Founder and Chief Investment Officer of Universa Investments. Spitznagel is the author of The Dao of Capital: Austrian Investing in a Distorted World and was the Senior Economic Advisor to Rand Paul.

SEE ALSO: Millennials lost money trading some of the worst products ever developed by Wall Street

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As regular readers of ValueWalk will know, the US exchange traded fund industry is currently experiencing record demand for its products and services.
On Monday Monday TrimTabs Investment Research reported that US equity exchange-traded funds received a record $97.6 billion from Tuesday, November 8 through Thursday, December 15 as investors have gone all in on the Trump rally.

Despite the fact they are regularly slammed for their lack of financial planning ability, millennials have also been buying ETFs in the wake of Trump’s victory. However, as Bloomberg reported earlier this week, citing data from TD Ameritrade, millennials haven’t exactly profited from their trades.
Millennials Get Slaughtered Trading Trump

According to Bloomberg, millennials piled into high-risk, high-reward bearish leveraged ETFs following Trump’s win. The two most popular ETFs are triple-levered ETFs that own gold miners, The Direxion Daily Gold Miners Index Bull 3x and Direxion Daily Junior Gold Miners Index Bull 3xThe ProShares Ultra VIX Short-Term Futures is the second most popular trading instrument. These three ETFs have lost 55%, 61%, and 38% respectively since the election.

It’s not just highly speculative leveraged instruments that have been popular with millennials since November 08. The fourth and fifth -most purchased instruments are the Vanguard Total Stock Market ETF and iShares Russell 2000 ETF both of which have gained with the market since the election.
This isn’t the first time TD Ameritrade’s research has shown that millennials prefer highly risky Wall Street products. And the beginning of 2016, the online brokerage published a list of the top stocks traded by millennials using its platform throughout 2015. Apple topped the list, followed by a Netflix, Facebook and Disney. At number five was the VelocityShares Daily 3x Long Crude ETN, which is possibly one of the worst product ever developed by Wall Street. Due to the structure of the product, contract roll costs, and a daily reset, the product is only useful for day traders and has produced a return over the first 47 months since inception of -99.7%.

Still, millennials can hardly be blamed for piling into gold and gold like instruments following Trump’s election. Almost every analyst on Wall Street was recommending the same thing, although I doubt any were recommending 3X leveraged junior miner ETFs.

Read the original article on ValueWalk. Sign up to get our free newsletter and receive our free e-books on famous hedge fund managers and value investors. You can also check out ValueWalk on Facebook, Twitter and Yahoo Finance Contributors. Copyright 2016.

https://srsroccoreport.com/bundesban...-than-planned/

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(By Wolf Richter)

A “trust-building” measure after an enormous hullabaloo.

“In 2016, we brought back again substantially more gold to Germany than initially planned; by now, nearly half of the gold reserves are in Germany,” Bundesbank President Jens Weidmann told the German tabloid Bild in what has become an annual Christmas interview about gold – to soothe the nerves of his compatriots.

Because they’d been frazzled, apparently, by this whole saga.

The German Bundesbank, which is in charge of managing Germany’s gold hoard of 3,381 tons, the second largest in the world behind the US, got into hot water in 2012 when rumors were circulating that some or much of its 2,000 tons of gold stored in New York, London, and Paris might not be there anymore, that it might have been melted down, leased, or sold.

The ensuing hullabaloo left some folks at the Bundesbank red-faced. Then the Rechnungshof (the federal government’s independent office of financial control) told the Bundesbank to rethink its overseas gold hoard. So the Bundesbank got to work. And in January 2013, it promised that by 2020 it would bring back all 374 tons of its gold that it kept at the Banque de France in Paris and 300 tons of its gold at the New York Fed.

Bundesbank Executive Board member Carl-Ludwig Thiele told the German daily Handelsblatt at the time that these moves were a “trust-building” measure, and he tried vigorously to put the rumors about the missing gold to rest.


READ MORE HERE: Bundesbank Hauls its Gold back from New York & Paris Faster than Planned
Happy Holidays everyone….

http://www.marctomarket.com/2016/12/...technical.html

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While few will be trading in the week between Christmas and New Years, we thought it might be helpful to review the dollar's technical condition. We make two overall points.

First, although the dollar's rally strengthened and extended after the November US election, this leg up of the dollar's longer-term rally began at the end of Q3.The anticipation of new policies by the Trump Administration, part of the story, but other forces that were also impacting, such as the divergence of monetary policy. The US economy was approaching the Fed's targets, and the December hike was telegraphed in earnest starting in September (when we had thought a hike was likely).

The eurozone economy is expanding near trend, but the low price pressures meant that it was premature to expect the ECB to abandon its asset purchase operations. It is more difficult to assess BOJ monetary policy, which shifted toward targeting the 10-year yield. The BOJ appears to be buying fewer JGBs, so its balance sheet growth has slowed. Perhaps the significance will be better appreciated if the rise in US rates continues to exert a pull on Japanese bond yields.

Second, the technical readings are getting stretched and the technical indicators suggest a correction is in the offing. Thus far, where they have occurred, the dollar pullbacks have been shallow, and mostly shy of technical retracement targets. The dollar's rally has truly climbed a wall of worry. As they have for several weeks, many remain concerned that the market is getting ahead of itself. Trump, they say, will be unable to deliver the kind of fiscal stimulus the market expects. Also, they argue that the market is gone a long distance toward pricing in three Fed hikes next year. Investors who put much stock in the dot plots could be disappointed (again).

Nevertheless, the value of appreciating the technical condition of the market is that allows the quantification of the risk. It is far from perfect, to be sure, and admittedly, it is more an art than a science (though some would say the same about macroeconomics), but it can assist in risk (money) management.

Most broadly, the Dollar Index rose in four of last week's five sessions. It has risen seven of the past 10 sessions and 10 of the past 15. It has risen for three consecutive weeks, and in six of the past seven, and nine of the past 12 weeks. This could be a definition of an uptrend. Yet a yellow light is flashing, meaning that the market is likely to have a proper correction soon. The Slow Stochastics and MACDs are about to turn down.

What level would the Dollar Index have to break to suggest a correction is at hand? The 102.50 area is notable. It corresponds to recent lows and a 38.2% retracement of the rally since the Fed's hike. A break of that area could signal potential toward 101.00-101.50.

The euro did fall to new multiyear lows last week near $1.0350, but that seemed to be more a function of thin trading. Consolidative trading, even if choppy, characterized the euro's price action. It closed little changed on the week. A move above $1.0510 would likely signal that the consolidation is morphing into a correction. That level corresponds to a 38.2% retracement of the drop since the Fed's hike. Above there, the $1.0550-$1.0570 area beckons, but corrective potential extends toward as $1.0675.

The dollar broke down to JPY116.55 after finishing the previous week near JPY118, but it happened at the start of the week. And for the rest of the week, the greenback consolidated at higher levels, spending practically no time below JPY117.00. It appeared the dollar was tracing out some wedge of pennant formation, which is most often continuation patterns. However, our reading of the technical indicators suggests that maybe it is not a wedge but a gradual grind lower. The downtrend is clear. It comes in near JPY117.65 at the start of next week and JPY117.50. The technical indicators are consistent with a retest and possible break of JPY106.50. The next target is in the JPY105.25-JPY105.50, which corresponds to retracement objectives and congestion area from earlier this month.

Sterling fell each day last week. It was the worse performing major currency, losing 2% against the dollar. It has fallen in 12 of the past 15 sessions in this three-week slide that has taken it to its lowest level since early November. It has the feel of year-end related adjustments more than fundamentally driven, though the rate discount to the US is historically large. How it performs near $1.2200, which is the 61.8% retracement of the rally since the flash crash in early October. A break could send it back into the $1.2080 area. The technical indicators are not in agreement. The MACDs recently turned lower, but the Slow Stochastics are overextended to the downside. The RSI is tracking prices lower.

After sterling, the Australian and Canadian dollars were the poorest performers among the major currencies last week (-1.7% and -1.4% respectively). Although the unexpected contraction in Canada's October GDP (-0.3%) weighed on the Canadian dollar before the weekend, the Australian dollar fell more. Recall that among the currency futures; the Australian dollar was the only one (that we track) in which speculators were net long.

The Aussie has fallen in seven of the past eight sessions. It is down three consecutive weeks and eight of the past 12. Before the weekend it neared the May/June lows (~$0.7145). There weekly close below $0.7200 is important because it corresponds to the 61.8% retracement of this year's rally. A move above there would help to stabilize the tone, but the technical indicators suggest this is unlikely. The next downside target is found around $0.7065.

The US dollar has approached the 50% retracement of this year's drop against the Canadian dollar from multiyear highs in January. The retracement is found near CAD1.3575 and repulsed the greenback last month. It has a running start, with oil prices easing and the interest rate discount to the US widening. The technical indicators are consistent with a continued uptrend. The 61.8% retracement is near CAD1.3840, but before it gets there, the CAD1.3760 area may be important. It corresponds to the measuring objective of the earlier flag pattern.

The February light sweet crude oil futures contract was little changed last week. A break of the $52.00-$54.00 range is potentially important. The technical indicators are not generating strong signals. The rally spurred by the swing in market sentiment from OPEC is dead to it has re-established order appears to have run its course, and the market has reverted to watching US inventories. Technically, a break of the $50.80-$51.00 area, the neckline of a potential head and shoulders top, would warns of a more significant pullback.

US 10-year Treasury yields drifted lower last week. Yields slipped a few basis points at the start of the week and then went sideways in narrow ranges. Unable to push through 2.52%, but the high yield print generally slipping to 2.56%. The low on the March 17 10-year futures contract has been steadily but slowly climbing since December 15. Indeed before the weekend the futures contract returned to the closing level on December 14 when the Fed announced its hike with the median dot plot suggesting three hikes next year. That level 123-13 also corresponds to the 50% retracement from the December 14 high. The next retracement objective is 123-21. The technical indicators favor additional near-term gains.


The S&P 500 were virtually flat last week. Momentum has evaporated, but rather than correct lower, it is moving sideways. This may be serving to keep some nervous longs invested. A break of 2250 would be the first sign that the correction may have begun. Since November 4, the S&P 500 rallied 9.3% before the consolidation began. The Slow Stochastics rolled over first, and the MACDs are in the process of turning lower. The RSI is drifting lower. It is also unusually rich relative to its 200-day moving average. It has been more than two standard deviations (2~253) above its 200-day moving average since December 7.