As noted in yesterday's comments, making too much of moves in ANY market at this time of the year is the height of folly. There is simply too much year end book squaring taking place in incredibly thin trading conditions to put any credence in price moves except in those markets with the absolute strongest of fundamentals.
Please be aware that I am limiting comments mainly because it is a waste of time for any trader to attempt to ascertain any future price movements from the action in this last trading week. As goofy as today's moves have been, tomorrow's are liable to be even worse!
There are huge air pockets above and below every market that is trading right now with so many large players out of the markets until next Monday that anyone who has a hankering to try their hand at market manipulation ( pushing prices around merely to run stops ) is going to give it a try to see if they can pull it off.
Some are trying to make a big deal out of the situation in Greece but frankly that it a tempest in the proverbial tea pot in my view. Greece's problem is Greece's problem. It is not Spain's or Germany's or France's. Sure, any election that puts another left wing group in charge will foul things up for Greece's financing package but that is something that is limited to that country. Any government that might end up being elected is going to soon get a lesson in reality and that there is a huge difference between electioneering slogans and dealing with real world finance issues.
What you are seeing is an exaggeration of price movements due to the lack of liquidity at this time of the year. It is especially tragic that we do get something like the Greece thing this week and not next week. The reaction would likely be much more subdued.
For now, short term technical will dominate the markets. As mentioned yesterday, traders should have lightened up by now or have gotten flat. Watching hustlers run your stops and screw with your positions is never fun so after a while you learn to deprive them of their toys. Personally I have nothing but contempt for the parasites and ticks that make their livings this time of the year by raping the public. Sadly, the exchanges will never do the right thing and just shut down the markets for the last week of the year because they are too greedy trying to collect more trading fees.
As mentioned previously, look at the weekly and monthly charts and those will provide the perspective one needs to keep from being confused and frustrated by the meaningless and random price movements that we are currently seeing.
Early next week the full complement of traders will be returning and then we can put some credence into the moves we get at that time.
For now, this is the time for the worst of the worst in this industry to make themselves manifest.
Thanks Dan.
ReplyDeleteHi Dan,
ReplyDeleteHere in Belgium it seems that the turmoil in Greece IS a big deal. Our finance minister and the president of the Belgian National Bank were interviewed yesterday and they sure seemed frightened. Who has the biggest chunk of Greece's debt on their balance sheet? --> The ECB.
Furthermore around the first time Greece was a threat back in 2012, the Netherlands and Germany prepared to re-instate the guilder and mark in case the euro failed. I can't imagine that they're very relaxed about it this time around. EU head Juncker even warned that a 'wrong vote' could lead to disaster.
In my opinion the risk of contagion (riots in Greece) is lurking around the corner, not so much a financial risk but one to dissolve the EU. Not so long ago Brussels was on fire during riots. Catalonia voted for independence from Spain. Some parties leading the polls in France and Italy favor a EU dissolution...to me it's a disaster waiting to happen, but then again I'm a pessimist.
You are not a pessimist imho : the fear is about Greece leaving the Euro and the EU if Siriza makes it, plus the risk of "Yes, we can, too!" contagion to other larger EU countries.
DeleteGreece gets the boot sooner than later imho.
DeleteThe element of time (and creative bookkeeping) has allowed the following quote/mindset to telegraph what's going to happen regarding Greece.
"...Greece is no longer of systemic importance to the euro..."
~☆~☆~☆~☆~☆~☆~☆~☆~
~Euro zone no longer obliged to rescue Greece, Merkel ally says~
BERLIN | Wed Dec 31, 2014 6:13am EST
BERLIN (Reuters) - Euro zone politicians are not obliged to rescue Greece as the country is no longer of systemic importance to the single currency bloc, a senior member of German Chancellor Angela Merkel's party was quoted as saying.
In an interview with Rheinische Post newspaper published on Wednesday, Michael Fuchs also said Greek politicians could not now "blackmail" their partners in the currency bloc.
"If Alexis Tsipras of the Greek left party Syriza thinks he can cut back the reform efforts and austerity measures, then the troika will have to cut back the credits for Greece," he said.
"The times where we had to rescue Greece are over. There is no potential for political blackmail anymore. Greece is no longer of systemic importance for the euro." (cont.)
http://mobile.reuters.com/article/idUSKBN0K90LM20141231?irpc=932
he might as well have said, "Sie können Kuchen essen."
Delete"However, our Yearly Bearish Reversal is 1.2156 precisely where we are trading at the time of this update. A closing beneath this area will bring all our forecasts into being." - Martin Armstrong.
ReplyDeleteHow can one concur with that??
How can a change of 0.0001 $ on a YEARLY candle change the forecasts for next years?
On my clock, a T.A level is an area, and this area must be considered based on recent volatility and the time scale.
Writing that Eur Usd will remain bullish if it closes at 1.2157 but bearish if closes at 1.2555 is absurd.
But like on many other blogs, I can't answer this on Armstrong's blog : comments are not allowed.
Well, the Euro is certainly not showing strength or going up in value. If higher targets are not met then down she goes. Closing below targets only confirms a trend, in this case a yearly trend trend.
DeleteThe locals in Euroland have cause to be concerned. Mother hen Germany is getting tired of sitting on rotten eggs. Euroland bankers are looking for other jobs. Just talk of countries considering exiting the Euro will do more damage to Euro's status. Eventually they will have to leave as a worldwide depression forces countries to default for survival by leaving Euroland banking. Once it happens, probably going to be in blocks of countries.
Who will pickup the pieces? Russia? China? India?
Hubert, I told everyone a long time ago that Spellcheck Armstrong was a clown and a charlatan, like Edgar Casey, Nostradamus, Livermore, and Celente; they are master salesmen and psychologists. They give you the obvious about the general trend and so forth, but then always give you the BIG move, somewhere out there 12-18 months or so, to keep you hooked on either their subscriptions, books, or whatever. They know the game and in the beginning, their customers do not, but after they do, new pigeons come in to be fleeced, like P.T. Barnum. Why do you think that 99.99 % of the losers in casinos do not realize that the best bet in the joint is to fade the dice and then lay the maximum against the number? We both know the answer to that I would hope. Happy New Year!!!
DeleteHi Steve,
DeleteI've been following Armstrong for the last year. For the most part his predictions have been right. What other "forecasts" has he made in the past several years that have not been correct?
Thanks!
I think Armstrong is interesting regarding fundamentals, and his high level understanding of economics.
DeleteOn the technical analysis aspect, it is absurd to say Euro Dollar will be bearish under 1.2155 but neutral or bullish above 1.2157 based on the 31st december close. I don't trust Armstong regarding T.A, especially short-term : the explanations are confused, not complete, say one thing and the opposite, etc...with many wrong anticipations on time. So his "model" to me is BS, the one he makes money on.
About the Eur Usd, I am bearish as well, but not based on the close of 31st december.
On the Weekly time scale, both bollinger are heading down, but more importantly the ET MACD reversed down 8 candles ago. Usually, after it happens, the inf bollinger band should reverse quickly to the upside. If it doesn't, and it didn't, well...it indicates a strong probability of the continuation of the downtrend.
Support area is around 1.20 down to 1.18, so let's see, but...I'm not optimistic, I could easily imagine 1 dollar for 1 euro sometime in 2015.
I've been burnt by James Dines in the past, so I am skeptical of MA too. I trust guys like Hubert and of course Dan.
DeleteBut I've noticed, for example, when MA states that a yearly close below 1.2155 would be bearish then that's were the number goes like a magnet by year's end. Is it because he has many big player followers who listen to his advice? Do you believe MA when he claims that he advices the biggest players like governments, hedge funds?
Indeed Mr. MA is quite skimpy (and even sometimes erroneous) with explanations in his free material. I've attended his trading seminar$$ which actually did have substance (I'm a professional).
DeleteAnyway... these are simply price levels which, if exceeded at certain point in time, trigger a signal. It's common in time-and-price analysis like his and other Cyclical TA.
Note that if the signal is NOT elected, that does NOT imply the opposite conclusion. That is, if the bearish signal is not elected, it is NOT a bullish indicator; rather, it's a nothing. So it's not a 0.0001 difference beween being bearish and bullish; rather it's the difference between being bearish and not bearish at a certain point in time for a specific level for a particular time fractal.
It's not mysterious or BS, rather it's just a methodology that can appear mysterious until one gains some exposure.
Don't understand why recently my posts must now be approved?... I've been here since 2011, just an infrequent poster but a regular reader.
DeleteJ...I think TD has it set up that way to prevent the doomer 'bugs from setting up camp on here while he tends to the pay side of the site.
DeleteHi DPH. I understand. At least he didn't suddenly delete this site like elsewhere. Obviously it costs money and time to maintain it.
DeleteThe delay to publish isn't terribly long but it precludes timeliness and correction of an error like I typed before. So are your posts immediately published or also delayed for approval? (as you're a frequent poster)
Looks like everybody wanted their year end statement to be able to say "we lightened up on stocks." Might be genius. Might end up chasing stocks again next year, just like they did last year. Only the Shadow knows...
ReplyDelete2015...A Tale of Two Currencies...
ReplyDelete~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~The year of dollar danger for the world~
"My prediction for 2015: The dollar will hit $1.08 against the euro before 2015 is out, and 100 on the dollar index"
By Ambrose Evans-Pritchard
12:00PM GMT 01 Jan 2015
We are entering a new financial order where there is no longer an automatic “Fed Put” or a “Poliburo Put” to act as a safety net for asset markets
America’s closed economy can handle a surging dollar and a fresh cycle of rising interest rates. Large parts of the world cannot. That in a nutshell is the story of 2015.
Tightening by the US Federal Reserve will have turbo-charged effects on a global financial system addicted to zero rates and dollar liquidity...(cont.)
http://www.telegraph.co.uk/finance/economics/11312671/The-year-of-dollar-danger-for-the-world.html
~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~Greek expulsion from the euro would demolish EMU’s contagion firewall~
"If Syriza rebels win power on January 25 and carry out threats to repudiate the EU-IMF Troika Memorandum, Greece alone will suffer the consequences"
By Ambrose Evans-Pritchard
6:33PM GMT 31 Dec 2014
~Should EMU leaders choose to cut off liquidity support for the Greek banking system they might find that their contagion defences are a fiction~
We know from memoirs and a torrent of leaks that Europe’s creditor bloc came frighteningly close to ejecting Greece from the euro in early 2012, and would have done so with relish.
Former US Treasury Secretary Tim Geithner has described the mood at a G7 conclave in Canada in February of that year all too vividly. “The Europeans came into that meeting basically saying: 'We’re going to teach the Greeks a lesson. They are really terrible. They lied to us, and we’re going to crush them,'” he said.
“I just made very clear right then: if you want to be tough on them, that’s fine, but you have to make sure that you’re not going to allow the crisis to spread beyond Greece.”
German chancellor Angela Merkel did later retreat but only once it was clear from stress in the bond markets that Italy and Spain would be swept away in the ensuing panic, setting off an EMU-wide systemic crisis...(cont.)
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11319525/Greek-expulsion-from-the-euro-would-demolish-EMUs-contagion-firewall.html
Ambrose Evans-Pritchard is like a lagging indicator, by the time he states the trend it's a day late and everyone else sees the same thing. Even Jim Rickards was touting the Euro as a safe haven in an info commercial not to long ago, he's going to be dead wrong.
DeleteArmstrong predicted, seems like a decade ago from jail, that the Euro would fail and the US$ woujld rise along with US markets and gold would correct plus he explained structurally what was wrong with all of them besides the folly of human nature.
As for the skeptics, we need them for the other side of trades.
Looks like the USD is on a tear towards an eventual 100 handle with gold headed towards sub-$1100.
ReplyDeleteSilver has become inconsequential and an afterthought.
What is there possibly left to credibly (or accurately!) say out of the gold/silver promoter/doomer camps at this point?
They can blame it all on whomever or whatever evil entity they choose to invoke but the main culprit was their inability, or more importantly, their unwillingness to consider the opposite side of the coin in all matters.
When you're wedded and invested in a belief system that revolves around a dark doomer/collapse scenario you were almost guaranteed to get blindsided by the market reality that's now unfolding.
The silence out of the promoter camps is deafening with little to no mention of their early 2014 (or 2013, 2012, 2011 etc) predictions but that isn't stopping the bullish predictions for 2015.
Live, learn and move on or remain stuck in someone else's clouded world outlook that revolved almost entirely around a negative USD-centric outlook.
Get ready for 100.
Yep. That "end of the keynesian experiment" and/or "dollar collapse" stuff looks more and more ridiculous every single day. They CAN'T change their tune one iota without a loss of subscribers.
DeleteLook at how they are trashing Hugh Hendry now. Simply because he did what any intelligent person would do, change with the reality. He is paid to make money, and that's what he is determined to do, belief systems be damned.
http://www.zerohedge.com/news/2014-12-31/hugh-hendry-embraces-central-planning-matrix-i-am-taking-blue-pills-now
Gold has a really hard time getting down to 1000 though doesn't it? Even though I've trimmed back my miner holdings considerably it would be folly to ignore the sector. With some astute timing and picking, I can make a better return in two or three weeks than if I had everything invested in S&P stocks for the whole year. It's the long termers that are taking a bath.
DeleteAnd, as if by magic, ZH decides to tee up Hendry for some more ass-chewing. Such is the price to be paid for dumping the Doomer Kool Aid on the ground and refusing to fight the tape. I have a feeling Mr. Hendry does not care in the least what the ZH faithful think. Good for him.
Deletehttp://www.zerohedge.com/news/2015-01-02/contrarianism-and-danger-taking-hugh-hendrys-blue-pill
There is much to gleen from what Draghi is implying within this article just a couple days into 2015.
ReplyDeleteThis sounds like eventual EU federalism to me. I don't think it'll work as intended if that's indeed the goal.
Seems to me that something like that would've been the thing to try and accomplish years ago and not when a recession/depression is at the doorstep.
The "improvement from within" can only happen as the weaker fringe members are cast out and the circle of wealtheir countries gets smaller. That's what I see happening.
~☆~☆~☆~☆~☆~☆~☆~☆~☆~
Mario Draghi
JAN 2, 2015 0
~Stability and Prosperity in Monetary Union~
FRANKFURT – There is a common misconception that the euro area is a monetary union without a political union. But this reflects a deep misunderstanding of what monetary union means. Monetary union is possible only because of the substantial integration already achieved among European Union countries – and sharing a single currency deepens that integration.
If European monetary union has proved more resilient than many thought, it is only because those who doubted it misjudged this political dimension...(cont.)
http://www.project-syndicate.org/commentary/ecb-eurozone-economic-union-by-mario-draghi-2015-1#i8W9LBxPfChO3teB.99
Jim Willies been predicting this every year for as long as I can remember but people continue to lap this stuff up.
ReplyDeleteI wonder if he sometimes laughs to himself as he makes this stuff up or if he's actually delusional and on meds.
And that whole "The Voice" nonsense. C'mon, really?
Maybe he hears voices and needs meds?
For entertainment purposes only...
ReplyDelete~☆~☆~☆~☆~☆~☆~☆~☆~☆~
Jim Willie: It's GAME OVER. The Dollar is DYING!
1/1/2015
http://www.gramsgold.com/news/jim-willie-its-game-over-the-dollar-is-dying
His market letter seems to focus more on hyperbole & fear than on trading or investing.
DeleteI think his title is probably right... but his timing is probably wrong.
And if you have the right trade but the wrong timing, then you're wrong. I know cuz I been-there-done-that plenty of times.
Well said, J. Wrong is wrong. None of this "just wait!" or "I was early!" garbage. Off to the dustbin with those losers.
DeleteI see the EURUSD broke 1.20 for a low of 1.19961 and the DXY easily plowed through 91 towards the end of the day and ends the week at 91.16
ReplyDeleteAt this rate the EURUSD will be at par by Sept/Oct '15 or sooner. :-o
But s'pose the ECB QE disappoints, at least in terms of its size. Cuz of, y'know, the germans.
DeleteJust sayin..... I really dunno.
Take a look at 20 years of a Monthly chart for the JPM Global Volatility Index, back to 1995. This is like the VIX of FX markets.
DeleteNotice how this chart made big bottoms in 2014 at about the same level that it did in 2007 and 1996.
In the past you see this preceded very big moves higher in Volatility, USD and a very ominous event (i.e., the Asian meltdown of 1997-98 and the US meltdown of 2008-09).
Long gold from 1172. I explained this setup a few days ago in Dan's last blog post.
ReplyDeleteTargeting at least 1263, the October high. Basically, playing this as the C-wave in an ABC correction (representing Intermediate wave 2 up of Primary wave 5 down).
Stop loss below 1142, the last low five weeks ago. Thus reward:risk is 3:1. Draw a line between that low and the last low on the daily chart, and you see gold is respecting that lower trendline, for now.
This wave-C of ABC should reach as high or higher than wave-A did at 1263. By that point no doubt the gold pumpers will get very excited. I will be looking to short gold from up above there for the next big drop.
Wishing a prosperous new year.
Eur Usd update.
ReplyDeleteHi all, I had a look at Eur Usd, here is what I see :
Quarterly time unit : well, a re-test of 1.16-1.17 lows of 2015 seems quite at hand, especially with the coming greek elections (25th january) and uncertainty. Bollinger bands started to diverge (bad for bulls as we are pushing on the inf band).
Monthly time unit : MACD is nearing the previous lows where it saw Eur Usd bounce. That could favor a short term bounce on the 1.17 area, especially as CDUR is in its lows and should bounce upwards soon. But my longer term target on this time unit seems to be 1 dollar for 1 euro :(
Weekly time unit : CDUR at its highs, heading down. We broke many supports in tems of price, including the descending wedge. The target should therefore be the support of the red downwards channel I drew before...which will soon reach 1.17 as well.
Conclusion : I'm expecting a test of 1.17 area and a bounce short-term there. The 1.17 is to be monitored, as :
- there may be no bounce (ouch! panic?)
- the bounce may be short lived.
Have a nice weekend,
Good post. Are you pro? (by that I mean try to make a living from the markets with your own capital, not from others' money, lol).
DeleteI think your BB (and double BB) are perhaps about as good a method as any for trying to identify a potential turn.
For anyone interested, these techniques are explained in detailed but easily-understandable fashion in The Little Book of Currency Trading (disclaimer: the author is an old friend). Published in 2010, it's now probably available in the city library, maybe even electronically.
Hi,
DeleteI never read a TA book in my life, I tested and consolidated some things here and there from several persons to make it my current "trading system".
Some indicators I'm using can't possibly come from the book you describe, such as CDur, as it is proprietary from a trader I know.
You can propote your friend's book as much as you like, but simply don't associate it with my trading :)
Demand for the dollar dramaticaly increases despite the alternative reality that J. Willie and others insist upon.
ReplyDeleteMaybe Jim's just "confused" and he meant the EUR. }:^)
~☆~☆~☆~☆~☆~☆~☆~☆~☆~
"The U.S. dollar's share of reserves rose to 62.3 percent, totaling $3.9 trillion, up from 60.7 percent in the previous quarter and marking the highest share since the last quarter of 2011."
"This changes the entire dynamics of euro/dollar," Galy said. He said the data signaled coming weakness in the euro and that it could hit $1.14 against the greenback in the first quarter of 2015."
~Euro share of FX reserves lowest in more than decade -IMF data~
NEW YORK, Jan 2 - The share of currency reserves in the euro held by central banks fell to its lowest in over a decade...(cont.)
http://www.reuters.com/finance/currencies
Jim Willie is confused. Yes, I think we can take that to the bank...
DeleteIf you took at all the analysts' opinions on gold, put them in a hat and shook them up, you would just come up with a big fat zilch. So-called analysis is little more than entertainment exploiting human gullibility and naivete, for bucks - as in "let me read your palm, duckie, there is a tall dark stranger coming into your life."
ReplyDeleteAs for gold, no one has a clue medium-term what it is going to do except the insiders, and all the charts and graphs in the world will not give you the answer. Long-term, for the economy to 'recover' (just a reactive word really) you would have to believe in a miracle, because of the insane totally out of control debt staring us in the face, but which no one wants to look at, to know what will eventually happen, as sure as day following night.
I do wonder at times if the current mountain of debt is truly insurmountable.
DeleteThe longer this goes on the more surmountable it appears to be...for now.
True, it can't go on forever, but might it not go on for quite awhile?
It seems to me that in an era of very accomodative CB monetary policy (if not outright eventual debt monetization) that if liberal stimulus becomes the norm (except for those countries who insist upon some sembalance of fiscal austerity) that those countries that grease/monetize their own tracks will propel themselves further along then those countries who are squeamish to do so and who are quick to hit the brakes currently.
If China ( the supposed heir apparent to the US/USD) has greased their way to growth/prosperity by a reported $25 TRILLION in loose stimulative debt spending the past decade then what's to stop the US and others from
adding onto their annual debt pile by a mere TRILLION or two?
Is it possible that the concept of a TRILLION of anything is a hard if not almost impossible concept to embrace at this point by us non-CBanker citizens in the same way a BILLION or $100 BILLION and eventually $1 TRILLION etc. was 20-30 years ago when they also seemed like a giant number?
In an era of extremely accomodative monetary policy out of (debt) necessity by everyone it seems possible that a TRILLION eventually becomes a more comfortable concept to digest.
Might we not be talking about the same type of things years from now about huge debt loads when we start talking about 30, 40, 50 TRILLION dollars/yen/yuan/euros at some point?
I don't know.
But it seems to me that if the major CB's are happy to grease their own skids into the future and the pool of currency available is growing at rate comparable to (or exceeding) the debt being created that the numbers we're discussing are sustainable for a lot longer then seems possible.
Crazy, right?
You are totally on to something there, DPH. A lot of this uproar about debt, QE, etc, is simply small brains' inability to grasp large numbers and the elasticity thereof.
Delete$5T is ghastly for a Fed balance sheet? I wonder what they will say about $50T? I'm sure they will be all full of righteous indignation, proclaiming imminent collapse. Same old movie...
Too many now believe you can monetize your way to prosperity and that because it is working so far that it will continue to work.
Delete2008 showed it does not work forever. At some point the easy money fantasy always dies.
The stock markets used to rise because of the economy was doing well.
Now central banks are trying to do it in reverse.
They are trying to make the stock market go up and drag the economy along with it.
Crazy indeed, Darkpurple.
With debt comes deflation and inflation only comes when enough electronic zeroes are made to cover the total outstanding debt including possible swaps losses, interest payments on all outstanding bonds, entitlements, etc. With enough zeroes created then devaluation of a currency begins. After devaluation comes a short period of inflation in a viscous cycle leading to default but everyone is wiped out back to the stone age, worse if invaded by some pissed off countries dividing up your land mass to cover debt outstanding. You may throw is revolutions, government upheavals, wars and conflicts, disease, starvation, suffering along the way, all leading to a reset.
DeleteIt is bad when Drudge Report links to GREECE NEARING EURO EXIT? It is getting kind of obvious that something is seriously wrong and the Euro chart confirms this. On the other hand, Armstrong says if Greece leaves then it is an investment opportunity there as they recover from oppression of a non-elected banking cartel. Least they have a chance sans an invasion.
When Japan finally folds then US time is nearing. The US is extremely resilient or at least the citizens are and the bigger they are the harder they fall. Won't be pretty, anyone out of debt will be considered rich and a target. US markets and the dollar only seem to go up as everything else is falling, no matter, we are the safe haven at the moment.
Somewhere in South America a sheet of toilet paper is worth more than local currencies. Why, is because governments never stop spending. What happens when they run out of toilet paper?
Banking only works until your run out of taxpayer funded bailouts. By the year 2020, the direction of where we are headed should be clear.
Gosh Eric, I never thought of it like that, so if we do big brain thinking all we have to do is mentally convert 5 trillion into 50 trillion and all will come right? In the Weimar Republic they had much bigger brain thinking than that and needed wheel barrows of currency just to buy a few groceries
DeleteEUR/USD: TA is so far into oversold territory that it's lost and can't be found LOL (too bad for my gigantic short :( ) Time to cover, I'm afraid--and wait for a bit more equilibrium to be re-established, and try it again.
ReplyDeleteAs an ant, I'm quite certain that the elephant I'm riding on (which is part of a very large herd) has also noticed this same set of conditions--and will be acting accordingly...
Turkey senses the tsunami on the horizon...but will it make any difference?
ReplyDelete~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~Turkey Seeks to Curb Banks’ Short-Term Dollar Debt Binge~
By Onur Ant
January 04, 2015 10:38 AM EST
Turkey’s central bank is acting to curb short-term foreign-exchange borrowing before Federal Reserve Chair Janet Yellen begins raising U.S. interest rates.
Lenders will need to keep 18 percent of their total foreign-exchange debt maturing within a year as part of reserves, instead of 13 percent currently, Turkey’s central bank said in a statement on Jan. 3. The ratio for debt maturing in three years was reduced by three percentage points to 8 percent, it said.
Turkish banks’ foreign-currency debts have more than doubled between 2009 and the first quarter of last year to $137 billion as they took advantage of cheaper borrowing costs in dollars to expand domestic lending in liras. Of the total, $85 billion is at short maturity, according to International Monetary Fund data...(cont.)
http://mobile.bloomberg.com/news/2015-01-04/turkey-seeks-to-curb-banks-short-term-dollar-borrowing-binge.html
When talking about trillions I like to think of space travel to help put things in perspective. If we wanted to travel to the nearest star, Alpha Centauri, it would take 165000 years to cover the 4.3 light year distance (25 trillion miles). Meanwhile, we haven't yet landed a human on Mars, and are not likely to do so for decades. Yet many talk about star travel as an inevitability just round the corner, and that we humans can do anything, absolutely anything. If ever there was an argument for God, it is our own ridiculous insignifance and almost utter cluelessness, yet at the same time astonishing arrogance.
ReplyDeleteOthers tell us that with our clunky computers, and robots that can hardly walk, we will have designed a machine that can excel human intelligence in 30 years! We forget that we are just 200 years out of the beginning of the Industrial Revolution.
Yet somehow our wonderful boffin economist geniuses have worked out a method to run our economy on everlasting debt, and many, even otherwise intelligent people, are starting to believe it. In reality It is all about kicking the can down the road and delaying the inevitable, and how long is that really possible?
Death of the dollar?!?!
ReplyDeleteUSD continues to surge...91.77 at last glance.
http://finviz.com/futures_charts.ashx?t=DX
HOly crap, that's a big gap up in the greenback...
DeleteEuro, Aussie, and Kiwi seem to be taking the worst of it.
Surging against much weaker currencies anyways. In real terms it seems to be spinning its tires.
DeleteThroughout history we have had many panaceas to assuage human woes and angst. There was the elixir of life, the philosopher's stone, astrology, witchcraft, the Delphic Oracle, numerology, reading of the auspices, spiritualism, necromancy, propitiation ceremonies and sacrifices to the gods, religions of every sort and description ....... and then we had Keynesianism, which has now become the magical conversion of debt into wealth.
ReplyDeleteBut even Keynes never believed that everlasting, uncontrollable, exponentially increasing debt, could end in anything else but disaster.
Civil War amongst the Silverbugs!!
ReplyDelete"First as tragedy, then as farce"
http://www.silverdoctors.com/srsrocco-takes-on-ted-butler-market-data-proves-overwhelming-public-demand-for-silver-eagles-not-jp-morgan/
Maybe it could mark a bottom? Just kidding...
This monetary experiment will have failed long before 50 trillion Peter, as even the sheep public will have woken up by then.
ReplyDeleteThe Dow might go to 50,000 though, kinda like Argentina's stock market kept rising as they kept printing.
Everyone knows printing eventually fails, I am sure Eric knows it too.
I would agree with that only to add that "eventually" might take awhile in an age of electronic/digitized monetary policy.
DeleteAnd just to be clear...I don't think running up huge deficits and debts is a great idea or that prosperity for many will be a byproduct of it.
I simply believe that to many of us a TRILLION (or ten or twenty) in dollar debt seems unsustainable.
But if you're a central banker or treasury official a TRILLION is far more comfortable and familiar number and is only one more "zero" to contend with on your balance sheet.
As we've all seen...the CB'ers and large financial entities of the world believe they can handle or manage almost anything...and to this point they have even if it seems ineffective or unsustainable (to us).
However, given the element of time and the ability to make financial rules and laws that suit their cross purposes it seems to me they still have lots of leash to run with.
With the US having effectively discontinued the concept of a hard debt ceiling last May I no longer hear howls in the media about the debt benchmarks being hurdled with ease. We'll be at $20 TRILLION by Fall/2016 at this rate.
But will it matter if China has been doing almost the exact same thing? If the US and China were to suddenly put the austerity brakes on the world would go into a deep/long depression after the artificially subsidized "growth" they manufactured comes to an end.
Same thing with Japan. What if they suddenly stopped printing yen and started tightening up? It would not only damage themselves but other countries markets as well.
All of the CB's might be at the point of "full speed ahead!" because to reverse course would set up a deflationary black hole.
Just about every CB or large entity on Earth clamored for and accepted multiple TRILLIONS ($15-20?) of USD that the Fed/Pusherman injected into the monetary landscape and the consequences of being weened off of those easy dollars and low rates has the EM's sick to their collective debt stomachs at this point.
The Fed has everyone right where they want them...addicted to low rates and the liquidity that only the pusher of last resort could provide.
I see this continuing for quite awhile. That doesn't mean I see it as a positive thing but merely a necessary one for the CB's for now.
At best, Central Banks follow the markets, at worst they interfere. They are total reactionaries to the situation.The EU banks were going to buy their own bonds then decided to pump up shares instead in their local markets (the dump comes later). Why? Stimulus? Stimulus of a dead horse. World is in a depression leading to deflation at the moment all due to debt.
DeleteThe US is collecting record tax receipts but keeps on spending more.
Venezuela has run out of toilet paper and now having enough soap is the issue which in turn leads to begging of Red China's help (lender of last resort help them expand).
Is traderdan.net down?
ReplyDeleteDoes anyone know when traderdan.com will be up and running?
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