Central Bank News Link List – Jan. 2, 2013: UK calls for G8 action on trade, tax and transparency

By www.CentralBankNews.info 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

AUD/USD: Budget Deal Bolsters Risk Sentiment

With the tides eventually turning in favor of President Barack Obama and the Democrats, the bipartisan US Congress finally agreed to and voted for a budget deal to avert the fiscal cliff drama. Risk sentiment is bolstered, and the safety bet US dollar is expected to falter opposite its Australian commodity dollar counterpart.

A report from Reuters has it that, “the United States averted economic calamity on Tuesday when lawmakers approved a deal preventing huge tax hikes and spending cuts that would have pushed the world’s largest economy off the “fiscal cliff” into recession. By a vote of 257 to 167, the Republican-controlled House of Representatives approved a bill that fulfills President Barack Obama’s re-election promise to raise taxes on top earners. The Senate passed the measure earlier in a rare New Year’s Day session and Obama said he will sign it into law shortly.”

“This is a typical risk-on market, where the yen and dollar are sold,” said Satoshi Okagawa, a senior global markets analyst in Singapore at Sumitomo Mitsui Banking Corp. “The cliff is behind us for now.”

Financial markets are relieved that the US Congress finally came to a compromise, ending months of bickering by both sides and avoiding a fiscal disaster for the world’s largest economy. Asian markets rose to a five-month high in earlier trading, while European shares made solid gains in morning trading. The FTSEurofirst 300 Index traded at highs not seen since May 2011 after a rare New Year’s Day session in which the Republican-controlled House of Representatives staved off automatic spending cuts and tax increases by approving a Senate-backed bill that raises taxes on families earning more than $450,000 per year.

Likely adding to the positive mood in the demand for the riskier Aussie is the economic release in the first of the year showing that a gauge of China’s manufacturing showed a third month of expansion. This adds evidence that the recovery in the world’s second-biggest economy will extend into the new year, positively affecting the currency of its trade partner from the Land Down Under.

A buy bias is recommended for the AUDUSD in light of the market optimism. Still, be on the watch for likely technical price corrections as the currency pair is already trading at the overbought territory.

For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions.

US Budget Agreement May Boost Riskier Assets Today

Source: ForexYard

Higher-yielding assets, including crude oil and the British pound, turned bullish to start off the week, as hopes that US lawmakers would reach a budget agreement encouraged risk taking before markets closed for the New Year’s holiday. Following the last minute budget deal, analysts are predicting that riskier currencies and commodities could extend their upward movement today. Still, traders will want to pay attention to the US ISM Manufacturing PMI, set to be released at 15:00 GMT. A worse than expected figure could boost the safe-haven USD and JPY.

Economic News

USD – US Manufacturing Indicator Set to Impact Dollar

The US dollar took losses against several of its higher yielding currency rivals on Monday, as signs of progress in “fiscal cliff” negotiations between US lawmakers led to risk taking the marketplace. Against the New Zealand dollar, the greenback lost more than 70 pips during the second half of the day. The NZD/USD was last trading at 0.8281 when markets closed for the New Year’s holiday. The GBP/USD gained some 115 pips during afternoon trading, eventually peaking at 1.6273, before dropping back to 1.6243.

Turning to today, analysts are warning that the dollar could take additional losses against its main currency rivals if yesterday’s last minute agreement to avoid the “fiscal cliff” leads to investor risk taking. In addition, traders will also want to pay attention to the US ISM Manufacturing PMI, scheduled to be released at 15:00 GMT. Predictions are calling for the figure to come in at 50.2 which, if true, would signal expansion in the manufacturing sector and may lead to additional losses for the safe-haven greenback.

EUR – Euro Poised to Resume Bullish Trend Today

The euro, which failed to capitalize on investor risk taking, took moderate losses against several of its main currency rivals on Monday. Against the US dollar, the euro gained some 45 pips during mid-day trading to reach as high as 1.3227, only to reverse the gains later in the day. The EUR/USD was last trading at 1.3196 when markets closed for the New Year’s holiday, down just over 30 pips for the day. The EUR/GBP fell around 60 pips over the course of the day, eventually reaching as low as 0.8102, before bouncing back to 0.8122.

Today, some analysts are predicting that the euro will be able to resume its bullish trend, as a last minute US budget deal yesterday may encourage investors to shift their funds to higher-yielding assets. Still, traders will want to pay attention to manufacturing data out of Spain, Italy, the UK and US. Should any of the data come in below the forecasted levels, fears regarding the pace of the global economic recovery may hurt riskier assets, including the euro.

Gold – Gold Sees Significant Gains before New Year’s Holiday

The price of gold saw significant gains on Monday, despite the risk taking in the marketplace which typically weighs down on safe-haven assets. The precious metal last traded at $1675.51 before markets closed for the New Year’s holiday, up close to $20 an ounce.

Today, traders can anticipate additional volatility in the price of gold, as manufacturing data from several euro-zone countries, the UK and US are all scheduled to be released. Any worse than expected data may lead to additional gains for gold during European trading.

Crude Oil – Risk Taking leads to Significant Gains for Oil

The price of crude oil saw significant upward movement on Monday, as speculations that US lawmakers were close to reaching an agreement to avoid the “fiscal cliff” of tax increases and budget cuts, led to risk taking among investors. The commodity was trading at $91.87 when markets closed, up more than $1 a barrel for the day.

Turning to today, oil traders will want to pay attention to the US ISM Manufacturing PMI at 14:00 GMT. Analysts are predicting that the PMI will come in at 50.2, which would signal expansion in the US manufacturing sector. If true, speculations that demand for oil in the US will increase could boost the price of crude further.

Technical News


The Bollinger Bands on the weekly chart are beginning to narrow, indicating that a price shift could occur in the coming days. Additionally, the Slow Stochastic on the same chart has formed a bearish cross, signaling that the price shift could be downward. This may be a good time to open short positions.


Most long-term technical indicators show this pair range trading, meaning that a definitive trend is difficult to predict at this time. Traders may want to take a wait and see approach for this pair, as a clearer picture is likely to present itself in the near future.


A bearish cross on the weekly chart’s Slow Stochastic indicates that this pair could see downward movement in the coming days. Furthermore, the Relative Strength Index on the same chart has crossed over into overbought territory. This may be a good time for traders to open short positions.


The Williams Percent Range on the weekly chart has dropped into oversold territory, indicating that an upward correction could occur in the near future. Additionally, the Slow Stochastic on the same chart has formed a bullish cross. Opening long positions may be the smart choice for this pair.

The Wild Card


The Relative Strength Index on the daily chart has fallen into oversold territory, indicating that upward movement could occur in the near future. Additionally, the Slow Stochastic on the same chart has formed a bullish cross. This may be a good time for forex traders to open long positions, ahead of a possible upward correction.

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.

Obama Stimulus May Boost Dollar

Source: ForexYard


President Barack Obama’s economic stimulus plan is set to be voted on tonight in the U.S. House of Representatives. There is no certainty that he will get the required number of votes in order for the bill to be passed. However, the odds are in the bill’s favor. When the $825 million economic stimulus package does get approved, this is likely to push the Dollar up in the short-medium term. Additionally, it may curb the severity of the global economic recession.

It is important to understand that Obama faces opposition from conservative Republicans and liberal Democrats within his own party. On one hand, the conservative Republicans are concerned about socialism. Also, they want Obama to make more guarantees of tax cuts to middle-income workers, and to help small businesses. On the other hand, liberal Democrats are concerned that the tax cuts won’t go far enough to help lower-income workers, and will mainly benefit corporate America.

The approval of the stimulus bill will not only strengthen the U.S. Dollar, it will also lead to more volatility in the forex market. This may come about as each economic data release and important news event coming out of the world’s leading economies is likely to have a bigger impact on the currency markets than today, because if economic figures are negative, then investors will be more wary of the global economy than before the bill was passed. This is so, because the stimulus package is meant to kick start the U.S. economy. Additionally, it is meant to have knock-on effects on other leading economies.

On the other hand, if there is good economic data releases in the future, then safe-haven currencies such as the Dollar and Yen are likely to fall more than in today’s circumstances. Traders are advised to follow the news coming out of the U.S. as America’s Congressman vote for or against Obama’s stimulus package. The outcome of the vote later on is likely to lead to high volatility in the forex market in tomorrow’s trading. If you want to take advantage of the forex market, then we recommend you open an account and start trading today!

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.

Gold and Silver Gain Along with Stocks, “Chaotic and Unsatisfactory” Fiscal Deal “Could See Another US Downgrade”

London Gold Market Report
from Ben Traynor
Wednesday 2 January 2013, 06:30 EST

SPOT MARKET gold prices started the year by touching a two-week high above $1680 per ounce Wednesday morning, as European stock markets also gained following news of a deal in Washington to avoid the so-called fiscal cliff.

Gold in Euros and Sterling by contrast were little changed on the day by late morning in London, recovering losses following a slight dip during Asian trading.

Silver meantime rose to $30.89 an ounce – also a two week high – as other commodities also gained.

On the currency markets, the Dollar fell sharply against the Euro as Asia opened, before recovering some ground later in the day.

The EuroStoxx 50 index, which tracks blue-chip Eurozone stocks, rose to its highest level since August 2011, while prices for US Treasury bonds fell after Congress passed a deal to avoid tax rises and spending cuts that were scheduled to start today.

The House of Representatives passed a bill, agreed a day earlier in the Senate, that will extend tax cuts for all Americans except those in the top 1% of earners – defined as individuals earning more than $400,000 a year and families earning more than $450,000.

“Today’s agreement enshrines a principle into law that the deficit must be reduced in a way that is balanced,” US president Barack Obama said Tuesday.

“Everyone pays their fair share. Everyone does their part.”

The deal is expected to generate $620 billion in tax revenues over ten years, while the value of spending cuts in the deal over that period is $12 billion. The so-called sequester of cuts to military spending and programs such as Medicare was postponed for two months. The sequester, which was due to come into effect today, was agreed in 2011 when Congress last raised the debt ceiling limit on federal borrowing.

“The fiscal cliff was in many ways a self-made deadline to make [politicians] face the hard choices,” says Maya MacGuineas, president of campaign group the Committee for a Responsible Federal Budget.

“They once again managed to duck all of them.”

“The process was so chaotic and the outcome so unsatisfactory,” says a note from Citi fixed-income strategist Steven Englander, “that we are likely to see a further US downgrade at some point.”

“The colossal failure of political will to get America’s fiscal house in order should provide fodder for the gold bugs to bid prices higher,” adds Edward Meir, metals analyst at brokerage INTL FCStone.

“We suspect gold will likely do better over the next few weeks.”

Ratings agency Standard & Poor’s stripped the US of its triple-A rating in August 2011, shortly after the debt ceiling was raised to $16.4 trillion following weeks of political negotiation. The US Treasury said last week that the government has now reached that limit, and is undertaking extraordinary measures aimed at keeping government debt from hitting the limit for another two months.

If the US hits the debt, the government would be forced to “default on its legal obligations”, the Treasury says.

Over in Europe, Germany’s manufacturing sector contracted at a slightly sharper rate in December compared to a month earlier, according to purchasing managers index data published Wednesday.

Contraction also accelerated for the Eurozone as a whole, although UK manufacturing moved back into growth territory, PMI figures indicate.

China’s official manufacturing PMI meantime held steady at 50.6, with a PMI above 50 indicating sector expansion. Similar December data for the US are due to be published later today.

India, traditionally the world’s biggest source of private gold demand, is considering raising the cost of importing bullion, the country’s finance minister P. Chidambaram said Wednesday, adding that he expects the value of gold imports in the current fiscal year to be down 31% at $40 billion.

“This could dent demand for gold further,” said Gnanasekar Thiagarajan, director at Commtrendz Research in Mumbai.

“Because of inflationary fears, the government is not increasing duty on other essential commodities. Since this does not affect the common man, government could be encouraged to increase duty further to curb imports.”

The Indian government twice raised import duties last year, with the authorities citing gold imports as a major contributing factor the India’s trade deficit.

Ben Traynor

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


A Contrarian Investment Prediction for 2013

By MoneyMorning.com.au

contrarian investment prediction 2013

We were greeted in the office this morning by Dan Denning telling us that the best performing commodity in 2012 was…wait for it…lead. That’s right, good old lead. And the best performing equity index last year? Venezuela.

Have a think about that when you read all the expert investment predictions for 2013 over the next few weeks.

The truth is no one has any clue or special insight into which investment class will make money this year. That’s especially true in a global environment characterised by constant central bank intervention and the resultant currency wars.

As far as investment predictions go, we’ll stick our neck out and say that 2013 will either be a very good year, or a very bad one. We don’t mean to be facetious in saying that. The point is, the global credit bubble will either go on expanding, encouraging speculation and leading to the outperformance of risk assets (a ‘very good’ year) or it will collapse (a ‘very bad’ year).

You’re basically investing in a world now that will deliver those two outcomes…one first, the other later. It’s just that no one knows when, and in what form, the ‘later’ part will come. The credit bubble first popped in 2008. Then policymakers took unprecedented action to blow it back up again.

Here we are over four years and tens of trillions of dollars/pounds/euros/yen later and what has really happened? The money created to ‘fix’ the problems (reinflate the credit bubble) was government debt. So we have trillions more debt outstanding but economic growth remains lacklustre.

In other words, we’re adding trillions to the stock of debt but the flow of income resulting from it is actually quite weak. That means the global economy is not increasing its productiveness (measured by economic growth) enough to compensate for the large increase in debt .

But in a world where all the major central banks continue to monetise their debts and thus provide fuel for speculative stock market rallies, the vast majority of investors tend to ignore the weakening of the underlying economic structure.

But it’s virtually certain that the structure will break down at some point. 2008 was the warning sign. The world ignored it, and went about reinflating the flawed structure, which is what led to the problems in the first place.

It’s just that nobody knows when the second break down will occur… 2013, 2014, 2015… Or even further down the track?

Judging by the amount of sanguine and bullish predictions for 2013, it could be closer than many people think. A headline in the Financial Times says:

‘S&P 500 poised for new highs in 2013. Investors favour cyclical sectors such as industrials’

The Australian Financial Review says:

‘If investors take on risk it could be a good year’

There’s renewed bullishness about China and iron ore. The iron ore price has staged an incredible rebound since bottoming in September. It’s now trading around US$145 a tonne, breathing life into the majors – BHP and Rio Tinto.

The price rise is largely thanks to another surge in Chinese credit growth, which got underway in the third the quarter. According to Fitch Ratings Agency, the pick-up in credit growth puts Chinese broad credit on track to surpass US$2.7 trillion in 2012.

It will be the fourth consecutive year that China’s credit growth exceeds one-third of its GDP. Now that is a credit bubble.

So take the iron ore price surge for what it is…the result of an economy completely addicted to credit growth and infrastructure spending. How long the credit expansion can go on is impossible to know. But it can’t go on for ever.

CSLA commodities analyst Ian Roper reckons it will end this year sometime. Today’s AFR reports Roper as saying 2013 is a ‘transition year and the last time you will see a three-digit iron ore price.’

So there’s another prediction for you for 2013.

If you really wanted to go for a contrarian investment prediction for this year, you’d put your money on cash. With central banks engaging in a multi-front currency war and interest rates set to hit historic lows in Australia, the reasons to be out of cash and into something more risky are compelling.

After all, only an idiot would kept their money in cash when all the world’s central banks have ganged up to push investors into riskier investments.

While the logic of getting out of cash is certainly compelling, it’s the same logic that pushed investors into buying a home in the US in 2006, or commodities in early 2008. When it comes to the stock market, the logic of doing something is at its most dangerous when it seems to make the most sense.

That’s why we’ve got a soft spot for cash in 2013. It makes no sense to hold it. It’s not something you’d brag about at a dinner party. But you could’ve made the same argument about lead at the start of 2012.

As we head into 2013, keep in mind that anything can happen this year…and it probably will.

Greg Canavan
Editor, Sound Money.Sound Investments

From the Port Phillip Publishing Library

Special Report: The Fuse is Lit

Daily Reckoning:
The Great Monetary Devolution Away from the Gold Standard

Money Morning:
Australian Stocks: Still the Best Wealth Builder in Town

Pursuit of Happiness:
Gun Control: Did Obama Shed Tears for These Kids?

Australian Small-Cap Investigator:
Why Speculating On Small-Cap Stocks is Your Best Bet in a Rigged Market

The Population Problem Destroying Japan and the US

By MoneyMorning.com.au


It’s only been a little more than a week since Shinzo Abe won election as Japan’s latest Prime Minister in a landslide-election victory and the pundits are already lining up telling investors to ‘buy Japan’ because it’s ‘dirt cheap’.

The hope is that Abe’s promises of fresh economic stimulus, unlimited spending and placing a priority on domestic infrastructure will be the elixir that restores Japan’s global muscle.

As a veteran global trader who actually lives in Japan part time each year, and who has for the last 20+ years, let me make a counterpoint with particular force – don’t fall for it.

I’ve heard this mantra eight times since Japan’s market collapsed in 1990 – each time a new stimulus plan was launched – and six times since 2006 as each of the six former ‘newly elected’ Prime Ministers came to power.

The bottom line: The Nikkei is still down 73.89% from its December 29, 1989 peak. That means it’s going to have to rebound a staggering 283% just to break even.

Now here’s the thing. What’s happening in Japan is not ‘someone else’s’ problem. Nor is it something you should gloss over.

In fact, the pain Japan continues to suffer should scare the hell out of you.

And here’s why …

The so-called ‘Lost Decade’ that’s now more than 20 years long in Japan is a portrait of precisely what’s to come for us here in the United States.

Perhaps not for a few years yet, but it will happen just as we have already followed in Japan’s footsteps with a ‘lost decade’ of our own.

The parallels are staggering.
Were it not for the names – Abe, Ishihara, Noda – the headlines being played out in Japan could well be our own especially when it comes to campaign promises of unlimited stimulus, more infrastructure development and a busted economy. All three were fundamental pillars in Shinzo Abe’s reelection campaign just as they were in President Obama’s.

The False Promise of Another Japanese Recovery

So now that Japan has its sixth Prime Minister in six years, will things change? Will Abe’s efforts result in a Japanese recovery? Will this be ‘the’ year Japan comes roaring back?


In fact, Japan has just fallen into another recession. The data show that Japan’s GDP cratered -3.5% in the most recent quarter. Manufacturing is reeling and several iconic Japanese brands are poised for what will be very expensive and nationally traumatizing bankruptcies.

The country is the most indebted of any nation in the world with the combined total of corporate, private and public debt over 500% of GDP, according to Goldman Sachs.

The demographics are working against the struggling island nation as well. This isn’t a policy debate. It’s not a partisan issue. It’s a numbers game and right now the numbers are getting smaller.

There are a mere 2.8 workers supporting each retiree right now. That’s especially problematic at a time when the birth rate is declining so fast it looks like a toboggan run.

Worse, as I noted on Fox Business Network’s Varney & Company recently, several surveys show that young Japanese simply aren’t interested in sex, so a rebuilding of the domestic workforce is quite literally not going to happen.

You can attribute that to emancipated women, the cost of raising children, work pressures or other economics if you like, but that really doesn’t tell the entire story nor get at the root of the problem – a lack of desire.

One survey from O-Net, one of Japan’s largest online dating services, interviewed 800 young Japanese men and found that 83.7% didn’t have a girlfriend. The survey also showed that 49.3% had never had a girlfriend. Another survey from the Ministry of Health, Labor and Welfare showed that 36.3% of young men had no interest in finding one.

The Wall Street Journal reported that 59% of Japanese females between the ages of 16-19 stated that they are totally uninterested in or completely averse to sex.

Married couples don’t appear to be any different. Other data suggest that 40.8% of all couples are not only childless, but sexless as defined by not having had sexual intercourse for more than a month. So called ‘kamen-fu’, or loveless marriages, are far more common than you would think.

It’s no wonder the birth rate has dropped precipitously according to the National Institute of Population. Nor is it difficult to understand that ‘silvers’, which is what the Japanese euphemistically call their senior citizens, will make up 40% of the population by 2060 despite the fact that the total Japanese population is expected to shrink by 1/3rd over the same time frame.

The implications of this demographic shift are tremendous. The newly elected Abe-san can print all the money he wants. He can build more bridges to nowhere and even double the Bank of Japan’s inflation target to 2% if he likes.

It won’t make any difference on anything other than a short-term basis.

That’s because Japan crossed the point of no return and became a ‘post mature’ society in 1995, according to the National Intelligence Council. The term, in case you’re not familiar with it, means that there is a disproportionately large number of older people in a given society versus the younger productive and reproductive population.

Put another way, the country’s ‘window of opportunity’ quite literally closed.

The Window of Opportunity is Closing In America, Too

Many people are surprised to learn that the United States is in the same spot. But they are positively stunned to learn that its window of opportunity closes in 2015 – only three years from now, when it, too, becomes a ‘post mature’ country, and the median age climbs above 45 for the first time.

In vehement denial that we’re heading down the same path, they explain away the mountains of debt, the failed stimulus, the out-of-control corporations and complete political disarray. But they cannot explain away the demographics here anymore than they can in Japan.

When Japan’s markets fell in 1990, the numbers were already going in the wrong direction. The productive-age population had peaked and was in decline. Ours is, too. In fact, so is most of Europe’s.

Twenty-two years later it’s no surprise that there are fewer jobs and fewer Japanese workers. Nor should it come as a shock that the island nation is reevaluating its immigration policy, its military, and its role in the international community. There are huge, multi-year impacts that are directly related to fertility rates, not the least of which is the inability to kick-start its corporations.

Here in the United States, for example, we tend to think that immigration will be the miraculous do all, end all. Our fiscal survival, in fact, is predicated upon it.

In reality, it makes almost no difference whatsoever.

For instance, the Center for Immigration projects that immigration will increase the working age population to 58% of the total workforce by 2050. That’s only 1% above the 57% projected rate with no immigration. If immigration falls, our population curve is indistinguishable from Japan’s over the past 50 years.

As for the notion that immigrant children have more children (which is a key assumption in United States population-planning projections) – that, too, is flawed.

Not only does the data now show immigrant fertility rates are falling, but it also shows that fertility differences between American-born women of child-bearing age and immigrant women of the same age are not enough to increase the share of people falling into the productive working category.

In other words, immigration has only a minimal impact, if any, on slowing down the decrease in working-age population by 2050.

Put another way, there are presently 4.81 workers supporting every retiree over 65 in the United States. By 2050, this figure will shrink to 2.81 workers when you include immigration, and only 2.31 workers without. Remember, Japan’s figure is 2.8 today and has dropped since the 1990s.

Many investors gloss over this relationship – if they are aware of it at all. That’s a huge mistake.

By hitching their wagons and their money to populations where the productive population is in decline, investors are dooming themselves to a massive value trap. Sure they can capture periodic market bursts based on stimulus or some other influence, but over time they’ll be fighting powerful, self-defeating headwinds because the falling number of people in their productive years ultimately translates into earnings declines and changing purchasing patterns. The opportunity costs are simply daunting.

On the other hand, hitching your wagon to countries with growing productive-age populations, you can capture the ‘window of opportunity’ while it is opening.

That speaks to concentrating your assets and your investments on those choices backed by windows of opportunity still opening – like China’s and Brazil’s, which do not close until 2025 and 2030 respectively. And India’s, which doesn’t even open until 2015.

Obviously, all three of the markets I’ve just mentioned face their own challenges, so let’s be clear: I am not saying you have to invest in them directly. Chinese shares are obviously prone to accounting ‘irregularities’. Markets in India suffer from fragmentation. Brazil is struggling with inflation.

But I am saying invest because of them. That means making deliberate decisions to concentrate your assets and your investments in companies that will capitalize on places where the windows of opportunity remain open.

In some cases, that also means investing in those choices where the windows haven’t yet opened but are expected to as suggested by population growth.

There’s a big and profitable difference for investors who understand the contrast between the two.

Keith Fitz-Gerald
Contributing Editor, Money Morning

Publisher’s Note: This is an edited version of an article that 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

What is Negative Balance Protection in Forex Trading?

Source: ForexYard


Negative balance protection is also termed Margin Call. A Margin Call is a possible event in which a trader possesses losing positions that put him on the verge of entering a negative balance in his Forex account. In order to prevent such a turn of events, a margin call occurs. This is where all of the trader’s open positions are being automatically closed, thus preventing him from entering into debt.

Negative balance protection:

You’ll never have to face a debit balance (negative balance) when you trade with ForexYard. If your equity falls below your margin requirement, our ForexYard Trading Station will automatically close out your positions — think of this as a final stop order, always working for your protection. Our margin policy eliminates concerns about debit balances (negative balances) by guaranteeing that your risk is limited to only those funds you have deposited into your account.

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.

Don’t Expect the News to Tell You Where EUR/USD Is Going Next

Retrospective explanations of market moves don’t keep you ahead of the trend

By Elliott Wave International

On December 27, EUR/USD shot up as high as $1.3283. Forex news headlines were quick to comment:

“Dec 27 – The euro slightly extended gains against the dollar after strong U.S. new home sales data last month further lifted the market’s appetite for riskier currencies.”

But after EUR/USD hit that high, it promptly reversed and fell back down to the $1.3200 level, where it had been stuck all week.

You may ask: What happened to that “appetite for riskier currencies”?

Good question, and here’s the answer: That explanation came after the EUR/USD rally, not before.

See, it’s easy to fit the news to market action after the fact: Just grab the news story that best “explains” the move. But retrospective explanations don’t keep you ahead of the trend. To win in forex, you need forward-looking analysis, and you need it before the market moves.

On December 26, the editor EWI’s forex-focused Currency Specialty Service, Jim Martens, posted this comment on his Twitter feed:

EWI Forex Insider: @FX_ElliottWave
Now that we got the EUR rise we expected, the double zigzag rise from 1.3158 to 1.3256 leaves EUR/USD vulnerable to a decline.

Then, on the morning of December 27, Jim updated his Currency Specialty Service subscribers via this intraday forecast (excerpt):

EURUSD (Intraday)
Posted On: Dec 27 2012 10:01AM ET / Dec 27 2012 3:01PM GMT
Last Price: 1.3269
The overlapping rise and possible double top near 1.3309 could lead to a larger correction. A flat or triangle would lead to weakness…

And here’s the decline EUR/USD saw shortly after:

Note that neither of these two forecasts mentioned the news. And for good reason: The December 27 euro-bullish news would have had you buying EUR/USD all the way into the top.

Instead of the news, we at EWI look at objective Elliott wave chart patterns. That, and not the news, is what helps us to forecast the markets before they move.

We don’t always succeed. However, as you can tell from this example, our Currency Specialty Service delivers true forward-looking analysis. Get our forecast for the U.S. dollar plus 5 hidden market opportunities for 2013 in a brand-new FREE report >>


Free Report: 5 Hidden Market Opportunities for 2013

In this special 21-minute video report, EWI Senior Currency Strategist Jim Martens looks past the obvious — the “fiscal cliff,” the Fed, etc. — to give you a U.S. dollar forecast for 2013 that would astonish the mainstream experts. Jim then walks you through 5 precise Elliott wave “roadmaps” for 5 key FX market opportunities in the year ahead.

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This article was syndicated by Elliott Wave International and was originally published under the headline Don’t Expect the News to Tell You Where EUR/USD Is Going Next. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.