Lets talk currency. We should all know what fractional Reserve banking is, and what is has done to our various countries economies. Never ending cycles of booms and busts. Inflation, deflation. DEBT. EVER growing deficits, etc… and so on. We have 3 bad apples here.: US currency, now practically worthless. We have doubled our money supply yet again. Everyone is concerned with the deteriorating balance sheet of the U.S. We simply fire up the presses and “helicopter” Ben, can dump it out of the sky. How about the Yen? Well, their in serious trouble too. Worse off than any other G-8 nation. Their debt is great. The population aging big time. And they are certainly not having a baby boom. The nations demographics are bad. Japans currency strength (at times) is just moments of temporary insanity (in my opinion). Lets Not forget Europe and its PIIGS nations. They have been in trouble for months on end. Greece and Spain have had unsustainable levels of debt. Recently they have had their bond auctions and have taken on a ton more debt and the world cheers for them. Just like the U.S. … we got into trouble by having loose money and everyone spending like drunken Brazilian sailors, and MORE “stimulous” and spending is supposed to HELP us? WOW. OK. I guess loading the PIIGS with more debt is the answer.
I am being sarcastic. We have a worsening crisis on our hands now. Taking on MORE debt makes it nothing but worse. What is my point? We have 3 bad apples. Three VERY bad, rotten apples. The U.S. debt, the Yen, and the Euro. and we have governments, exporters, businesses, banks, hedge funds, central bankers, investment houses and retail investors all slugging it out in a “no holds barred”, “anything goes”, ” bare knuckle’s fist fight to the death. All trying to figure out which one is “less bad” for a little while. Welcome to the Jungle! You have entered the “Big Boys” arena. Best get ready to RUMBLE! So, if your going to trade forex… remember this, this is for the few, this is for the daring, the brave, the risk takers. Those with IRON. This is no game. This is high stakes here. We best be Focused, we best be patient and disciplined.
As I have said time and again, the markets are a giant oscillator, between “risk on” and “risk off” between USD strength and USD weakness. Between Yen strength and Yen weakness. Let us find what is “In Play” on the given day and work it, and work it well. For we are up against the brightest minds in the world and trying to take money off their table. And were playing with the Big Boys here. So, “nimble” is really wise. We are now faced with increased volatility on all these pairs, as they scrap it out. Lets be on the winning side.
Which one of these giants falls first? I think the euro, and after that the yen. But, seeing as they are ALL bad, Its probably just going to be a knife fight on a daily basis forever more. Scalping is the name of my game. Thanks for taking the time to read and till next time, happy trading. Michael Storm aka “robinhood”
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