By www.CentralBankNews.info Taiwan’s central bank held its benchmark interest rates unchanged, as expected, saying the current policy rate was conducive to maintaining price stability and promoting economic growth in light of a modest economic recovery, subdued inflationary pressures and global economic uncertainties.
But the Central Bank of the Republic of China, which has held its discount rate steady at 1.875 percent since June last year, struck an optimistic tone about next year, saying the domestic economy was forecast to expand by 3.15 percent in 2013 as exports and private investments are likely to revive on the back of a gradual economic recovery while consumption remains steady.
“Recent developments point to signs of stabilization for the global economy, with an improved outlook for 2013,” the bank said after a meeting of its board.
The central bank said the Taiwan dollar’s exchange rate was in principle determined by the market but when there is “excess volatility and disorderly movements” with adverse implications for economic and financial stability, “the CBC will step in to maintain an orderly market.”
Earlier this month the central bank intervened in the foreign exchange market to ease the upward pressure of the TWD, which has appreciated some 4.5 percent against the U.S. dollar this year.
It said the euro zone recession has eased, the U.S. economy looks set for moderate expansion, China has regained growth momentum and Asian emerging economies also see a rebound in prospect. However, the bank added there were still risks from the U.S. fiscal cliff and Europe’s debt crises.
The central bank’s board set a M2 growth target of 2.5-6.5 percent for 2013.
Taiwan’s economy picked up speed in the third quarter, expanding by 0.98 percent from the second for annual growth of 1.13 percent, reversing a 0.18 percent contraction in the second.
The central bank said the economy was estimated to have expanded by 2.97 percent in the fourth quarter from the third.
Inflation, which fell to 1.59 percent in November from October’s 2.36 percent, was estimated at 1.93 percent for 2012 and is forecast to fall to an annual rate of 1.27 percent next year due to expected steady international commodities and lower base effect for fruit and vegetables, the bank said.
The central bank’s market operations have been aimed at managing liquidity, it said, adding that banks’ excess reserves were steady at $21.6 billion and for the first 11 months of the year loans and investments by banks grew by an annual rate of 5.03 percent and the M2 annual growth rate averaged 4.22 percent, sufficient to meet the economy’s needs and support growth.
AUD/USD: Greenback Holds its Gains over the Aussie
The US dollar is looked forward to make gains over its Australian counterpart as the fiscal cliff negotiations continue to drag, but mostly on growth concerns in the land Down Under.
In another episode of the fiscal cliff drama, House Speaker John Boehner aims to use a vote on his alternate budget proposal to highlight Republican opposition to tax increases sought by President Barack Obama. All boiling down to the dynamics of the negotiations, market participants are set for another grueling series of pressure tactics.
As reported on Bloomberg by Kathleen Hunter & Roxana Tiron, the speaker’s proposal would permanently extend current tax rates on incomes below $1 Million a year and prevent the expansion of the alternative minimum tax. Based on studies of previous proposals, the bill would raise between $300 Billion and $400 Billion over the next decade, though an official estimate was not available as of last night. The plan would also set tax rates for capital gains and dividends at 20 percent on income higher than $1 Million. A tax already set to take effect in 2013 would push the total top rate on investments to 23.8 percent. The bill would continue current estate-tax rules that set the per-person exemption at $5.12 Million, indexed for inflation, with a top rate of 35 percent.
The house speaker’s ‘Plan B’ highlights Republican opposition to tax increases sought by the president. Boehner’s push for a House vote on his proposal is seen as a pressure tactic to force Obama to accept deeper spending cuts and a higher threshold for rate increases by showing how hard it will be to win Republican support for any tax increase. Senate Majority Leader Harry Reid and other Senate Democrats were among those rejecting Boehner’s plan, adding that the measure “can’t pass the Senate.”
With the fiscal cliff deadline looming nearer, and as Republicans continue to oppose tax hikes for the wealthy, investments could filter into the safety of the Greenback until stronger signs of progress come out.
Meanwhile, the Asian commodity dollar is on a decline for a third day on concern that the South Pacific nation’s economy is slowing and could be in store for more interest-rate cuts by the Reserve Bank of Australia. An interview published in the Australian Financial Review has RBA Governor Glenn Stevens saying that a seamless “handover” from mining to other drivers of economic growth could not be absolutely guaranteed.
Taking these fundamental news into account, a sell bias can be considered for the AUDUSD today. Technical price corrections are still likely, especially after Standard & Poor’s raised the credit rating of Greece from selective default to B- with a stable outlook, which could give a boost to risk demand.
For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions.
Trading the ABC Sentiment Shifts Ahead Of The Crowd
By David Banister, ActiveTradingPartners.com
Spotting the 3 day rest B wave for profits
One of the most obvious keys to successful trading or investing is buying low and selling high. The problem being if it was that easy to pinpoint those low and high points then all traders would be batting 1000%. What we use at my ATP service is a combination of fundamental analysis and catalyst spotting inter-twined with charting techniques. Most of our work revolves around buying substantial dips in a strong stock, 3x ETF’s, or reversal patterns. 3x ETF’s are great for short term swings as they function almost exclusively on crowd behavioral patterns, but it also applies to individual stocks.
In all cases what traders really need to spot ahead of the masses of investors is a subtle shift in sentiment. That key pivot point where the negative sentiment whether it be short term or long term is about to run out of gas, and the bullish sentiment is going to take over and reverse the stock or ETF higher or break the position out of a base pattern.
One of the most common patterns amongst many that we use as trigger points is the ABC pattern. This is a situation where the stock or ETF recently had a strong run. That run produced a flurry of over-optimistic sentiment and is reflected in the high spike in the stock from the prior base. We call this the “A Wave High” pivot point. This is where many of the traders who chase short term performance come in with a bang, right near the top.
The next key component is obviously then the “B Wave” pattern. There are many different formations for B Wave patterns, the one we will look at today is the “3 day rest” pattern.
B waves simply serve to work off the overbought sentiment of the crowd and remove the chasers who came into the trade high, at a loss. As the stock pulls back hard initially in the B Wave, stop losses are triggered by those with discipline. However, many traders continue to buy more of the position a bit early during this crucial B Wave pattern and then later they also get stopped out. Finally, Margin Calls are common and more stops are triggered and the B wave winds down and sentiment is horrible.
At that strategic bottoming area of the B Wave correction is where you want to start scaling long into the position for the ensuing reversal to the upside. Sometimes these are very short term trades as in 48 hours or so, and sometimes they are several weeks long depending. Many of the B waves on daily charts are what we term a “3 Day Rest” pattern, spotting these is very profitable.
Below we have a very recent sample 3 day rest B Wave pattern in a stock my firm recommended prior to a 15% one day move a few days after we alerted it, this being Vivus (VVUS). This produced an 11% net gain inside of 4 trading days after a 15% one day pop C wave rally. The two charts below show the 10 day chart with the 3 day rest pattern which we scaled into, and then the C wave to the upside. Also shown is a longer term chart where you can see the pattern as well. We traded this same pattern in ANR recently for 9-11% gains inside of 48 hours as well.
If you’d like to learn more about trading sentiment and catalysts for profitable Swing Trading, then join us at ATP. Go to ActiveTradingPartners.com and subscribe by using coupon code AD499ATP in the coupon code field at the bottom of the sign up form. Sign up for quarterly and the discount will be applied at checkout, and you will get The Market Trend Forecast for free as well.
David Banister
Czech central bank holds rate steady at 0.50%
By www.CentralBankNews.info The Czech central bank held interest rates unchanged, as expected, and the board will release details of its decision later today.
Last month the Czech National Bank cut its benchmark two-week repo rate to a record low of 0.50 percent and said it would keep rates at this level “over a longer horizon until inflation pressures increase significantly.”
The central bank also maintained its discount rate at 0.05 percent and the Lombard rate at 0.25 percent.
Inflation in the Czech Republic eased to 2.7 percent in November, the lowest rate this year. The central bank targets inflation of 2 percent.
The Czech economy is stuck in recession, with Gross Domestic Product shrinking by 0.3 percent in the third quarter from the second, the fifth consecutive quarterly contraction. On an annual basis, the economy shrank by 1.3 percent.
Last month the central bank revised downwards its growth forecast for this year, expecting the economy to shrink by 0.9 percent this year, down from 1.7 percent growth in 2011. In 2013 the Czech GDP is forecast to rise 0.2 percent and then by 1.9 percent in 2014.
Market Volatility Expected Following German, US Data
Source: ForexYard
Signs of progress in budget negotiations between US Congressional leaders and President Obama led to moderate risk taking yesterday, which gave a boost to the euro. That being said, a lack of significant international news resulted in little movement elsewhere in the marketplace. Today, traders can anticipate significantly more volatility when the German Ifo Business Climate and US Building Permits figures are released. The indicators, scheduled to be announced at 09:00 and 13:30 GMT, could boost higher-yielding assets, like the euro, if they come in above their expected levels.
Economic News
USD – Building Permits Data Set to Impact Dollar
The safe-haven US dollar took moderate losses against some of its higher-yielding currency rivals yesterday, following an increase in risk taking due to signs of progress in US budget negotiations. The USD/CHF fell some 25 pips during the European session to trade as low as 0.9155, while the GBP/USD gained 21 pips during the mid-day session to trade as high as 1.6225. Against the Japanese yen, the greenback remained within reach of a recent 20-month high, as speculations that the Bank of Japan will soon begin an aggressive policy of monetary easing weighed down on the yen.
Today, trades will want to continue monitoring any developments in the ongoing US budget negotiations, which need to be resolved to prevent the implementation of a set of automatic tax increases and budget cuts, known as the “fiscal cliff”, at the beginning of the year. Additionally, the US Building Permits figure, set to be released at 13:30 GMT, could generate volatility for dollar pairs. If the indicator comes in above the forecasted 0.87M, risk taking in the marketplace could result in losses for the safe-haven greenback.
EUR – Euro May Extend Gains Following German News Today
Signs of progress in US budget negotiations encouraged risk taking among investors yesterday, which led to moderate bullish movement for the EUR/USD during the mid-day session. The pair, which earlier in the week hit its highest point in almost eight-months at 1.3192, advanced close to 30 pips to trade as high as 1.3185. Against the Japanese yen, the common currency spent the day range trading between 110.70 and 110.45.
Today, euro traders will want to pay attention to the German Ifo Business Climate, set to be released at 09:00 GMT. Analysts are predicting that the indicator will come in at 101.9, which would represent a slight improvement over last month for the euro-zone’s biggest economy. A better than expected business climate result today is likely to generate risk taking, which could give the euro an additional boost during the morning session.
Gold – Gold Fails to Stay Above $1700 Level
After briefly advancing past the psychologically significant $1700 an ounce level during early morning trading, largely due to optimism that a US budget deal will soon be reached, gold prices once again began falling. The precious metal dropped close to $7 an ounce, eventually trading as low as $1695 by the evening session.
Today, gold traders will want to pay attention to the German Ifo Business Climate figure. Should the figure come in above the forecasted 101.9, investor risk taking could help gold prices reverse yesterday’s bearish trend.
Crude Oil – US Inventories Figure May Help Crude Reverse Downward Trend
After advancing close to $0.50 a barrel during Asian trading yesterday, largely due to signs that the US budget crisis was closer to being resolved, crude oil began falling during afternoon trading. The commodity traded as low as $87.65 by the end of the European session, down some $0.70.
Today, oil traders will want to pay close attention to the US Crude Oil Inventories figure, set to be released at 15:30 GMT. Analysts are forecasting that US inventories fell by some 0.9 million barrels last week, which if true, would be a sign of increased demand and could turn the price of crude bullish.
Technical News
EUR/USD
The Bollinger Bands on the weekly chart are beginning to narrow, indicating that this pair could see a price shift in the coming days. Furthermore, the Williams Percent Range on the same chart has crossed over into overbought territory, signaling that the price shift could be bearish. Traders may want to open short positions for this pair.
GBP/USD
A bearish cross on the weekly chart’s MACD/OsMA indicates that a downward correction could take place in the near future. Furthermore, the Relative Strength Index on the same chart appears close to crossing into the overbought zone. Opening short positions may be the best long-term choice for this pair.
USD/JPY
The Slow Stochastic on the weekly chart has formed a bearish cross, indicating that a downward correction could occur in the near future. Additionally, the Williams Percent Range on the same chart has crossed into overbought territory. Opening short positions may be the wise choice for this pair.
USD/CHF
The weekly chart’s Williams Percent Range has crossed into oversold territory, indicating that an upward correction could occur in the near future. Furthermore, the Slow Stochastic on the same chart appears close to forming a bullish cross. Traders may want to open long positions for this pair.
The Wild Card
CAD/CHF
The Slow Stochastic on the daily chart appears close to forming a bullish cross, indicating a possible upward correction in the near future. Furthermore, the Williams Percent Range on the same chart has crossed into oversold territory. Opening long positions may be the best choice for forex traders for this pair.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
Central Bank News Link List – Dec. 19, 2012: Taiwan’s dollar gains before interest-rate review
Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news
Why Uranium Stocks Could be Worth Another Look
In the last five years, the uranium sector has had more false starts than a frog race.
And uranium stocks have left a long list of burnt shareholders in their wake.
But now it looks like investors are gearing up to roll the dice one more time.
Beaten up uranium stocks have soared in the last few days.
For example, Australia’s leading uranium stock, Paladin (ASX: PDN), once trading at $10, was down as low as just 76 cents last month. But in the space of a week, Paladin has jumped 37.1%
It’s a similar tale from Energy Resources of Australia (ASX: ERA). After spending the last three years falling 96% from $26 to just $1.10, it has just jumped 20.3% in the space of a week.
This week’s Japanese election win for the nuclear-friendly LDP has been the trigger to set off this rally. The idea being that under the new mob, there is more chance of seeing most of Japan’s 50 or so reactors come back online, creating renewed uranium demand.
But there is more to the rally than meets the eye.
There is something else in the wind.
And just perhaps…we really are looking at the start of the next rally in uranium stocks…
At any rate, the spot price for uranium certainly wouldn’t give you any clues that the sector was about to turn up. After holding its ground around the $52 / lb level for most of the first half of this year, it had then crashed down to $42 / lb by October.
Such a low price is a pretty tragic state of affairs for the sector. Marginal projects become unviable, and such a low price makes it hard to justify building any new uranium mines.
Uranium Price on its Knees Again
Source: Cameco
The only glimmer of hope is that the uranium price has unexpectedly picked up slightly in the last few weeks. By last week, it had climbed a few bucks to hit $45.50.
But what’s interesting to note is that the last rally in the uranium price started from the low 40′s. So it’ll be worth keeping tabs on the uranium price in coming months, in case we’re about to see a rerun of that.
What really got me thinking about uranium stocks ahead of the rally was the big increase in corporate deals in the sector. In last week’s December Issue of Diggers and Drillers, I made a few comments on this:
‘Deals for uranium stocks also picked up, which is interesting. Uranium has been in the dog house for so long that at some point it has to become the ultimate contrarian play. The uranium spot price recently fell as low as $41 / lb, so I wouldn’t hold your breath. But with more corporate deals picking up, uranium should be on your radar at least.’
Uranium really is the ultimate contrarian play.
There is a sound investment case behind it. Yet I can’t think of a tougher commodity to get investors interested in. It’s the ‘pariah’ of the resource community.
Everyone hates it.
But there are two blunt forces in play that could make that irrelevant.
Firstly, 2013 will see the global supply of uranium chopped off at the knees.
This is because the ‘Megatons to Megawatts’ program, which has been converting Russian warheads into nuclear fuel, expires in 2013.
For years, this has met a big chunk of global demand, and without it there will be a gaping hole in the market.
Secondly, even after Fukushima, the world is still building a huge fleet of nuclear reactors.
China is the elephant in the room here, and may have been quiet on the subject, but is still full steam ahead with its nuclear plans. In a recent report from Resource Capital Research, the analysts said:
‘Strong growth in nuclear reactor construction is expected to continue globally with 484 planned and proposed nuclear reactors (Nov ’12) up 2 from 482 pre-Fukushima (Mar ’11). Growth is expected to remain particularly strong in Asia, with Chinese expansion continuing to lead the pack. China’s official installed nuclear capacity projections are 70-80 GWe by 2020, 200 GWe by 2030 and 400-500 GWe by 2050. This compares with a 12 GWe capacity today (15 reactors). China has 26 reactors currently under construction.‘Support and demand for new nuclear power reactors is expected not only from China and India, but also South Korea, USA, UK, the Middle East, Russia and Ukraine.
‘Demand for uranium is expected to increase from around 164mlbspa U3O8 in 2011 to 226mlbspa by 2020 and 280mlbspa by 2030. Current primary supply of uranium (139mlbs U3O8 2011) is only around 50% of expected uranium demand in 2020.’
This is a very bullish scenario. And as my colleague Callum Newman wrote to you recently, ‘Uranium is shaping up to be a classic resource scenario […] a supply/demand imbalance in a market everybody hates.’
Cal is right. It’s hard to find a more contrarian commodity investment proposition. I mean, the market REALLY hates uranium.
But…just maybe…it’s time to give this ‘pariah’ another go.
Uranium looks like being a resource to watch in 2013.
Dr. Alex Cowie
Editor, Diggers & Drillers
From the Port Phillip Publishing Library
Special Report: The Fuse is Lit
Daily Reckoning:
A North Korean Investment Opportunity
Money Morning:
How Central Banks Are Letting Inflation Get Out of Control
Pursuit of Happiness:
Are You Brave Enough to Break From Technology?
Diggers and Drillers:
Three Simple Steps to Manage Your Risk with Aussie Small-cap Mining Stocks
Why the Landslide Election in Japan Signals a Change to Investors
Japan has a reputation as an orderly, well-behaved society.
While this reputation is deserved, it’s actually quite odd when you consider how tumultuous the country’s politics are.
Japan has gone through six prime ministers in as many years. It’s about to get its seventh. And anyone living outside the country would be hard-pushed to name any one of them.
So you might be tempted to dismiss all the excitement over the latest Japanese election.
But you’d be wrong. This is one occasion in which politics could actually make a real difference…
Why is the Market Excited About Abe’s Return?
Shinzo Abe has already had a crack at being prime minister of Japan. Between 2006 and 2007, he was the top man before stepping down due to ill health. Now he’s back at the head of the Liberal Democratic party (LDP).
In between times, the country has experienced the global financial crisis, the Fukushima disaster, and an ongoing wrestling match with deflation.
The population is clearly getting fed up. In 2009, the Japanese voted for change. They ditched the LDP, which had been in power almost constantly since 1955, in favour of the Democratic Party of Japan (DPJ).
Now they’ve got tired of the lack of progress under the DPJ. They’ve brought Abe back in a landslide victory, which should make it easier for him to push through the various changes he wants to make.
So why are the markets getting so excited? The Nikkei 225 has risen by 8% in the past month alone.
It mostly comes down to Abe’s plans for the Bank of Japan (BoJ). Even although Japan is often seen as the birthplace of quantitative easing (QE), the country has in fact been far less aggressive with money printing than the US or the UK.
Abe wants that to change. He wants the BoJ to target inflation of 2% rather than 1%. And yesterday he was piling on the pressure ahead of the BoJ’s next meeting, which happens this week.
‘It is very unusual for monetary policy to be a focus of attention in an election. But there was strong public support for our calls to beat deflation. I hope the Bank of Japan takes that into account,’ he said.
A higher inflation target means more money printing. And more money printing means a weaker currency. In anticipation, the yen has already weakened sharply against the dollar, falling to a near-two-year low. And that should be good news for Japan’s embattled but vital export sector. This in turn, is what has helped the Nikkei to surge back towards the 10,000 mark.
There’s More to Japan than Just Weakening the Yen
But while the assault on the yen is the biggest headline-grabber, it’s hardly the only reason to like Japan.
There’s its banking sector. Having been through the sort of crisis that everyone else’s banks are still recovering from, Japan’s banks are in much better shape than almost any other developed world banking sector.
Japanese banks no longer need to focus on fixing their balance sheets. As a result, lending by the banks could expand greatly if they just have the incentive to do so.
Meanwhile, there are already signs of life in the stock market, which have little to do with the weak yen. According to Australian financial group Macquarie, more money is set to be raised this year from new companies floating, than from already-listed companies issuing new shares. That’s the first time this has happened since 1999.
Why is that good news? Because, says Macquarie, a recovery in the number of new listings could ‘spur greater participation by Japan’s retail investors’. In other words, it’d get the punters on the street back into the stock market.
As for the downsides: the nation’s poor demographics are constantly cited as one big reason to be sceptical of Japan. But demographics don’t have to be a problem if the culture is willing to change a little.
We’re not even talking about increasing the birth rate here, or taking a more relaxed view of immigration. Japan is already sitting on a lot of untapped potential: its potential female workforce.
The International Monetary Fund reckons that Japan could lift GDP by as much as 8% a head if the number of women in the workplace rose to northern European levels, reports Mure Dickie in the FT.
The main point to take away from the election result is that the Japanese people are clearly getting fed up with the condition of the Japanese economy.
As Abe pointed out, you don’t normally get voters excited about intricate details of monetary policy, but that’s not the case here. If the people want change, they’ll get it – and in this particular case, that’s exactly what Japan’s economy needs.
John Stepek
Contributing Editor, Money Morning
Publisher’s Note: This article originally appeared in MoneyWeek
From the Archives…
Why Small-Cap Stocks Could Be Your Best Investment in 2013
14-12-2012 – Kris Sayce
How the Global Oil Grab Affects You…
13-12-2012 – Byron King
The Price of Risk in the Stock Market
12-12-2012 – Murray Dawes
Why Silver Could Be the Best Investment in 2013
11-12-2012 – Dr. Alex Cowie
The Long, Drawn Out Retreat in Australian House Prices
10-12-2012 – Dr. Alex Cowie
Why We Should Abolish the Fed
The Federal Reserve System is a government-sanctioned private enterprise that functions as a socialist tool.
It was conceived in 1910 and constructed for the benefit of the private bankers who control it. Congress blessed the scheme in 1913 with passage of the Federal Reserve Act.
These days the Fed doesn’t just backstop America’s too-big-to-fail banks. It has expanded its doctrine of socializing banking losses globally.
The Fed helped bail out private businesses, foreign big banks and central banks in Europe and Japan in the credit crisis of 2008 and is the model for the European Central Bank, as well as the ECB’s primary backstop.
To understand how the Fed gets taxpayers around the world to pay the losses its member banks routinely incur, let’s pull back the curtain on the Fed and explain how it operates.
Here’s What the Fed Really Does
Banks lend money and sometimes they don’t get paid back. That’s not a problem if it doesn’t happen too often and if profits from other loans and investments cover the loan losses.
But since banks have gotten really big and have to make big loans (due to economies of scale and return on capital expectations) they need big borrowers. There are no bigger borrowers on the planet than governments, and that’s where a lot of banks are lending.
Of course, governments aren’t immune to over-borrowing and insolvency.
All the big banks that lent to banks in countries now in financial straits continue to lend to them because if they don’t they won’t get paid back what they are owed. Banks would fail from a cascade of losses and would either have to be bailed out or shut down.
That’s where the Federal Reserve comes in.
They don’t let their constituent members go under. If they have to, they will print money and give it to them, no matter how much they need.
That includes foreign banks and foreign governments. The Fed’s member banks lend all the time to both foreign banks and foreign governments. It only follows that our banks are not immune to what goes on anywhere they have lent money. They are directly in the line of fire.
If there was no Fed or no ECB, there wouldn’t be a backstop for banks that have lent to borrowers in Europe who can’t pay them back. Countries would fail.
But they don’t fail because central banks print money to give to banks so they can extend the loans they made, reschedule them, or in some way keep them going so they don’t have to write them off as losses.
What’s Wrong With Bankers Helping Bankers?…Plenty
The Federal Reserve System was designed to ensure that bankers always get paid. Congress blessed this scheme because Congress can be bought, was bought in 1913, again in 1977 when the Fed was given its ‘dual mandate’, and is still being bought and paid for by bankers today.
Essentially, the Fed operates on a socialist model. It’s not capitalism because banks would be ‘allowed’ to fail under the rules of capitalism.
But they are protected from failing by virtue of taxpayers being called upon, in one way or another (mostly by future inflation and currency debasement, in other words, less purchasing power) to ‘socialize’ banks’ losses.
There is no going backwards. Globally we couldn’t endure the hardships that would befall us if a cascade of big banks failed. So don’t worry, that won’t happen. But you should be worried about the creeping socialism.
The elitist class of bankers and money brokers, whose incredible wealth is protected by taxpayers, is going to have to increase the size of loans they make since they have more capital to disperse and earn income on, and will end up needing more taxpayers under their thumbs to keep their game a win-win for themselves.
Not that there isn’t a way out for us taxpayers, those of us who would like to earn more than half a percent on our fixed income investments. There is a way out…
We have to end the Fed. It’s just that simple.
End the Fed and all the big banks would have to be either shrunk or broken up, because there would be no more backstopping them with taxpayer money. The truth is they should all be made small enough to be allowed to fail without encumbering the national economy, or unfortunately today, the global economy.
Think about it. Banks that should have failed in 2008 are bigger than ever.
They’ve paid off what they borrowed to stay alive. They are paying dividends again. They are buying back billions and billions of dollars of their stocks again.
They are paying big fat bonuses again. But they still complain that tougher capital standards and reserve ratios will ruin their profitability and they won’t be able to lend to the people who need them.
Seriously, this is what the Federal Reserve does, has done, and will continue to allow to happen – unless we end the Fed and their game for good.
Shah Gilani
Contributing Editor, Money Morning
Publisher’s Note: This article originally appeared in Money Morning (USA)
From the Archives…
Why Small-Cap Stocks Could Be Your Best Investment in 2013
14-12-2012 – Kris Sayce
How the Global Oil Grab Affects You…
13-12-2012 – Byron King
The Price of Risk in the Stock Market
12-12-2012 – Murray Dawes
Why Silver Could Be the Best Investment in 2013
11-12-2012 – Dr. Alex Cowie
The Long, Drawn Out Retreat in Australian House Prices
10-12-2012 – Dr. Alex Cowie
USDCAD remains in downtrend from 1.0055
USDCAD remains in downtrend from 1.0055, the price action from 0.9824 is likely consolidation of the downtrend. Resistance is at the upper line of the price channel on 4-hour chart, as long as the channel resistance holds, the downtrend could be expected to resume, and another fall towards 0.9700 is still possible. On the upside, a clear break above the channel resistance will suggest that lengthier consolidation of the downtrend is underway, then further rally to 0.9920 area could be seen.
