Falling off of the Fiscal Cliff: close to $500 billion in tax increases

If no decision is made in Washington before January 1st, taxes are to jump an average of $2,400 for families with household incomes between $50,000 and $75,000.

How long do we have before America takes this devastating blow? 4 DAYS

Either D.C. is scrambling to find a solution or they are hopelessly thinking about the soon-coming effects. The republican and democratic mindsets do not mix. Some call this polarization. Both sides are miles apart from each other and if any plan is reached by Tuesday, it will be very compromised.

President Obama would like tax raises on the wealthy. Speaker of the House Boehner would like the crux of the plan to be spending cuts. (Although his plan B did propose tax increases).

In result of Congress not reaching a deal by January 1st, there will be an average tax increase of $2,400 for families with household incomes between $50,000 and $75,000. (Tax Policy Institute)

I’m a Forex Trader, what do I do?!

Run!!! Kidding.

As an Investor, protecting your capital is key.

You may see 250 pip days for certain currency pairs, do not get greedy. If you do, you may find yourself losing your cash in this ugly circle called the greed cycle.

Greed Cycle

 

Does that look familiar?

Yes there are going to be pips to be made. That also means there are going to be pips to lose. The wiser decision may be to wait until the brunt of the initial movement is over and jump on the trend.

You can see the effectiveness of this strategy in the 2008 Crash. Visit this link to see the 2008 crash.

We’d love to hear your thoughts about the Fiscal Cliff, comment below!

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