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19/47
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Since the brexit sparked another round of gold buying, I was prompted to read and analyze correlation between the gold, inflation and public debt. As from the 2000s, the Gold prices have participated in a bull run. As a key reason, the "easy money" policies of majority of key world's central banks are to blame. So, why is the gold traditional hedge against inflation ? I have been hearing this line on the CNBC and Bloomberg for years and years, especially since we are currently in the phase of deflation.
So what are the conditions that represent inflation? That list include rising property prices, a rising stock market, and increasing asset values. But also the debt burden, representing debt with relation to income, is increasing.
Inflation v Debt
High inflation usually travels hand in hand with higher debt burdens. What does this mean ? Let me try to explain this. Imagine a situation where the government borrows $10 billion today from the market and that inflation is 5%, and the government bonds yields 10%. After a year, the government owes the same $10 bn that they borrowed. Add to that 10% interest and a total is $11 bn. Since the bond yield (10%) is above the inflation rate, th…
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Forex_champion avatar

Nice info

sonjatrader avatar

Great article

hrustiashka avatar

Good article!

scramble avatar
scramble 20 July

Simple, quick, and clear! I like this article! Nice job :)

samymahrous avatar

good written

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18/58
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Because Greece is one of the most watched economic events in the past weeks, I want to talk a bit about the history of the Greek economy. This country isn't in this debt problem by chance of course, it has a track record of problems. Let's get started from the beginning.
The economist Charles Bullock has published an interesting essay on an economic experiment made by Dionysius the Elder, which was the ruler of the Greek city state of Syracuse from 407 B.C. to 367 B.C. What this leader did was to print more drachmas, which was the official currency of Greece during several periods in history, after he ran out of debt to fund his military campaigns. Because nobody wanted to lend him anymore money he forced his citizens to hand him all their money. Like this wasn't enough, after all the coins were collected he simply restamped one drachma coin as two drachmas. The problem here is that just printing more money was not a reliable way of creating more wealth. So Greeks have made a mess when it comes to economy for a long time.
Coming to a more contemporary timeline, if the Greek leaders had learned something from the past they would have not embraced the Euro as the common currency of …
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iiivb avatar
iiivb 12 July

I like this article. I disagree on "(...) if the Greek leaders had learned something from the past they would have not embraced the Euro as the common currency of the zone (...)" Actually I think that if Greek governments had indeed learnt something from the past, they would have changed already the ways they've been managing the money issues and adopting the Euro would have been a catalyst growth. Thanks for sharing!

Ivory avatar
Ivory 12 July

Thanks for the feedback. There is always a trade-off when a small country like Greece enters the same group with the "big fish" like Germany. The fast growth comes when you keep yourself competitive in the international market, you need cashflows for that, at least that's my opinion. Anyway, it looks like they'll keep themselves in the zone for now.

WallStreet6 avatar

Nice summing up. I like the story from the past- I see the Greek were searching for easy money already in the ancient times:)

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13/22
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I didn’t expect to be writing this article so soon. The idea first came up after the Bank of Japan unexpectedly eased monetary policy on October 31st The BOJ increased its bond buying program from 70 to 80 trillion and tripled its ETF purchases from 1 to 3 trillion yen. The surprise move lead to a 292 pips rally in the USD/JPY and on October 31st the currency closed off the week at 112.32. In the next month the Yen continued to be sold aggressively and last Thursday the Dollar/Yen spiked at a high of 118.97. But let’s start from the beginning.
The Rise of Abenomics
The latest round of easing is a continuation of a BOJ policy started back in 2012. After coming to power in December of 2012, the current prime minister of Japan, Shinzo Abe, started to implement a set of policies termed ‘’Abenomics’’. The aggressive policy changes involve radical quantitative easing, increase of public investment and structural reforms. Abe appointed Haruhiko Kuroda as head of the Bank of Japan with a mandate to generate 2 percent inflation. The inflation goal lead to the bank embarking on a massive buying spree during which the BOJ balance sheet almost doubled.
What’s Behind the Japanese Obsessio
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Convallium avatar
Convallium 30 Nov.

wonderful job!

fxigor avatar
fxigor 17 Dec.

I agree with this article.My aproach to forex market is technical but I agree that There Will be No Japanese Bailout.

fxsurprise8 avatar

fxigor glad you agree with me :)

Durden avatar
Durden 26 Jan.

Good job

driven avatar
driven 3 May

Extremely well-written article. I think your long-term assessment is probably true, but there is always danger in making short-term predictions.

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6/108
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Continued decline in all major markets - When will the financial crisis finally hit rock bottom, but still escape the double dip? More importantly:  when it hits the low, how to kick-start the recovery? That is why virtually everyone has their eyes fixed at efforts to ‘fix’ the EU and the euro. After the extremely negative news in the last period all over Europe, and particularly thorough and sustained media attention at the growing crisis, the expected happened - the Euro falls against all currencies. Will this continue to happen? Greece is widely perceived to be the main generator of crisis. The markets are well aware that Greece alone will not solve the problem. However, what is escaping the public discourse is that Greece is neither the sole nor the primary culprit of the crisis. The EU and its members states have for years, if not decades, funneled large amounts of resources into the Greek financial system, without due diligence – without ever considering the need, or the real ability of Greece to eventually repay the debt. For example, Greek public enterprises were running huge deficits – before the onset of the crisis, and Greek railways were losing around 1 billion EUR …
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Milani avatar
Milani 10 Oct.

I agree with you

ritesh avatar
ritesh 12 Oct.

Nicely written, quite detailed and informative article. Nice on bro, keep more coming. Best of luck and +1

stomaraka avatar
stomaraka 13 Oct.

Excellent article, and I share your opinion.

"Is someone benefiting from this?" is the most important question to ask,
and when you know the answer, everything will fall into place and make sense.

For trading this, I think that there will be battle on both sides long and short, so volatility will be high. I would not keep positions open for too long.

amerfx86 avatar
amerfx86 13 Oct.

I agree with you that postion on EUR/USD example you would not keep too long if you loosing money and if you trade against trend, but if oyu earning money you would have open trade a few days because trend on EUR/Usd know be long about 5-10 days

Cavalli avatar
Cavalli 26 Oct.

Nice article. Post another

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56/73
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Before explode of financial crisis in 2008 Swiss franc gained compared to US dollar almost 20% in six months. Now his quotation rise even faster. Only from beginning of spring Swiss franc gained more than 20% compared to euro and US dollar and most of this move from beginning of the July. This situation forced Central Bank of Switzerland to intervene by throwing 50 billions francs on market and decreasing bank rates. This brought temporary abreact on markets. But why investors buy francs and take him on all-time highs? This is all cause by losing fate in euro and US dollar. Considered as safest harbor for money in insure times, franc can indicate incoming financial storm. Rising public depts, low efficiency of saving programs and no solid plan from western governments to solve this problems this was real cause of investors exodus from stock markets in recent weeks bringing down world indexes. Recent decision of Standards & Poor about downgrading the nation credit rating of United States from AAA to AA+ has been surprise for some of us but macroeconomic data clearly shows that global economy is slowing on both sides of Atlantic. United Kingdom probably will enter in second p…
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Quant-Trader avatar

+1 :) Crazy times.. fatal reality :>

ritesh avatar
ritesh 25 Aug.

Nice and timely article. Yes, it's all can be called in two words: Financial Terrorism. +1 for ya buddy

LinnuxFX avatar
LinnuxFX 25 Aug.

Well done with this article, good luck for the contest ... vote for mine here : http://www.dukascopy.com/fxcomm/fx-article-contest/?action=read&article=How-To-Trade-Harmonics-&id=13

ritesh avatar
ritesh 28 Aug.

check out my articles too at http://www.dukascopy.com/fxcomm/fx-article-contest/?action=blog&user=ritesh

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