EUR/USD : trois évènements liés à l’Euro-Dollar à suivre cette semaine

La paire EUR/USD connaitra une semaine calme du point de vue macro-économique.

Sujets évoqués dans cette analyse EUR/USD

  • Le taux de change EUR/USD poursuivra-t-il sa remontée lors des prochaines séances ?
  • Les spéculateurs du cours EUR/USD pourraient surveiller trois évènements cette semaine

Taux de change EUR/USD en données 4 heures

Graphique du cours EUR/USD en unité de temps 4 heures

Graphique préparé par Yoav Nizard

Voici nos prévisions sur l’Euro pour les deux prochains mois

Lundi 5 novembre à 16h00 : indice PMI non-manufacturier du mois d’octobre aux Etats-Unis

La paire EUR/USD entamera lundi une semaine pauvre en statistiques économiques. L’indice PMI de l’activité non-manufacturière au mois d’octobre sera la principale d’entre elles pour le cours EUR/USD. Après avoir été mis sous pression vendredi par un remarquable rapport NFP indiquant 250 000 créations d’emplois non-agricole au mois dernier, le cours EUR/USD pourrait être orienté par cet indice PMI. Le consensus l’anticipe à 59,5 points. Un résultat supérieur pourrait renforcer le dollar américain et encourager le taux de change EUR/USD à reprendre sa dynamique baissière.

Rejoignez-moi chaque mardi, mercredi et jeudi à 13h pour mon point de marché Forex

Mercredi 7 novembre à 11h00 : ventes au détail du mois d’octobre en zone euro

Bien qu’elle ne soit pas majeure pour le cours EUR/USD, cette statistique a le mérite d’être la principale cette semaine en zone euro. Le taux de change EUR/USD sera en effet démuni de catalyseurs européens de premier rang, après avoir pris connaissance des taux de croissance, d’inflation, et de chômage. Rappelons cependant aux investisseurs de l’Euro-Dollar que Mario Draghi a indiqué lors de sa dernière intervention que la BCE surveiller les indicateurs économiques. Une accélération des ventes au détail pourrait influencer positivement le cours EUR/USD.

Jeudi 8 novembre à 20h00 : réunion de politique monétaire de la Réserve Fédérale des Etats-Unis

Décalée exceptionnellement à jeudi, cette réunion de la Fed pourrait être un non-évènement pour la paire EUR/USD. A moins d’une énorme surprise qui provoquerait une nette volatilité sur le cours EUR/USD, la banque centrale devrait laisser ses taux inchangés en attendant la réunion de décembre. Au lendemain des élections mi-mandat aux Etats-Unis, le taux de change Euro-Dollar pourrait néanmoins être orienté par le communiqué que diffusera la Fed. Jerome Powell n’interviendra pas en conférence de presse, la volatilité pourrait être amoindrie sur la paire EUR/USD.

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3 conseils de trading que j’aurais aimé connaître quand j’ai débuté sur le Forex

Quatre indicateurs techniques très efficaces que tout trader devrait connaître

Written by
P Vaidyanathan Iyer

Published: November 4, 2018 12:44:45 am

RBI, RBI Government standoff, RBI vs Centre, Centre vs RBI, reserve bank of india, urjit patel, Raghuram Rajan rbi bjp, bjp rbi, Indian economy, GDP ministry of finance, finance ministry, RBI independence, indian express Reserve Bank Governor Urjit Patel.

No. No, no, no, no. No, no, no. Yes. No, no, no.” This was a Reserve Bank of India governor on one end of a telephone call responding to someone. Curiosity got the better of a gentleman — incidentally there to call on the governor. He couldn’t resist asking who the person at the other end was. “The Finance Minister,” said the governor. The gentleman wondered aloud, not about the many ‘noes’, but the single ‘yes’. The governor replied, “In between, the Finance Minister asked me if I even heard him. I said ‘yes’.”

The RBI governor, the then finance minister, and the gentleman witness to this conversation will remain unnamed; all three are well-known personalities in public life. But the short point of the even shorter conversation illustrates the most critical aspect of the RBI-government relations: they are, and have always been, tenuous and complex, but the two must find ways to communicate and work together. When this communication breaks down, one has to eventually give way. And this cannot happen in the India of today.

The genesis of central banking in India and its history since the formative years of 1935-39 published by the Reserve Bank of India is replete with instances of differences with the government. In independent India, only once, in 1956-57, has the RBI governor had to quit. Interestingly, then too, as now, the fight centered around credit flow to various sectors of the economy — between the RBI’s ‘restrictive policy’ and the government’s ‘liberal’ stance. Then FM T T Krishnamachari made little secret of his views about the RBI’s stance. Then RBI governor Benegal Rama Rau stepped down, on January 14, 1957, after the Cabinet, under PM Jawaharlal Nehru, backed Krishnamachari. Rama Rau, an Indian Civil Service officer with a distinguished career, who had been the RBI governor for over seven years, chose not to speak publicly about the spat ever.

RBI, RBI Government standoff, RBI vs Centre, Centre vs RBI, reserve bank of india, urjit patel, Raghuram Rajan rbi bjp, bjp rbi, Indian economy, GDP ministry of finance, finance ministry, RBI independence, indian express RBI Governor Urjit Patel (right) with his predecessor Raghuram Rajan.

Apart from this, R N Malhotra and K R Puri have resigned as RBI governors following change of government at the Centre in 1990 and 1977, respectively.

India’s tectonic shift in policy-making and consequent high growth over the past three decades have also had a profound impact on regulator quality. In 2000-01, the size of the Indian economy was under $500 billion. By mid-2007, output doubled to a trillion dollars, putting the country among the top 10 economic powerhouses in the world. At $2.5 trillion now, India is the sixth largest economy in the world, and the fastest-growing too.

Economic regulators, and their real as well as perceived autonomy, influence flow of capital from the rest of the world to India, and add to its heft at the global round table. Not surprising then that the IMF said Thursday, “There should be no government or industry interference that compromises the independence of the central bank and financial supervisor.”

The history as present

Amidst turbulent times between RBI governors and the government over the past 25 years, channels of communication have never broken down. Sometimes, the Prime Minister himself has weighed in, like Atal Bihari Vajpayee did during the East Asian crisis to rein in Cabinet colleagues who were commenting on the strength of the rupee. At other times, for instance, during the 2008 global financial crisis, then deputy chairman of the Planning Commission Montek Singh Ahluwalia, who commanded respect both in Delhi and Mumbai, worked the backchannels with the RBI governor for the government.

Since liberalisation, there have been probably just two FM-RBI governor pairs whose co-tenures have been characterised by tranquillity, i.e., maximum respect, minimal friction. FM Manmohan Singh (1991-96), and Governor C Rangarajan (1992-97); and FM Yashwant Sinha (1998-2002), and Governor Bimal Jalan (1997-2003). Of course, once Manmohan Singh became PM in 2004, Rangarajan became his go-to person for solving tricky issues such as gas pricing or politically sensitive ones like the development of Jammu and Kashmir. Jalan came in at the RBI four months into the East Asian crisis, when the rupee was under tremendous pressure in the face of sanctions over the Pokhran nuclear tests. He mustered courage, flew to Delhi and asked PM Vajpayee to prevail upon his Cabinet colleagues to stop commenting on the strength of the rupee. When Vajpayee did so, it provided Jalan the space to keep the markets guessing about the timing of the RBI’s intervention in the forex market, and the flexibility to let the rupee relax beyond an informal band with sparse use of forex reserves.

These were exceptions. The relations in the times of P Chidambaram-Y V Reddy (2003-08); Chidambaram and Pranab Mukherjee-D Subbarao (2008-13); Arun Jaitley-Raghuram Rajan (2013-16); and Jaitley and Piyush Goyal-Urjit Patel (now), have been frosty.

In October 2012, RBI Governor Subbarao had belied FM Chidambaram’s expectations of a rate cut in his second quarter policy review, despite the latter unveiling a five-year fiscal consolidation plan the previous day. Clearly cut up, the minister had said, “Growth is as much a challenge as inflation. If the government has to walk alone to face the challenge of growth, then we will walk alone.” A week before his term ended, Subbarao shared his thoughts on accountability and autonomy in a lecture and said, “I do hope… Chidambaram will one day say, ‘I am often frustrated by the Reserve Bank, so frustrated that I want to go for a walk, even if I have to walk alone. But thank god, the Reserve Bank exists.’”

Reddy, who had preceded Subbarao, too had put up stiff resistance to the government on many an issue, including loan waivers to farmers and reforms in the financial sector.

In arriving at a middle path, a lot also depends on the personalities of the minister and governor. A sharp and extremely intelligent minister, Chidambaram was known to be impatient and demanding. Reddy was also known to stick to his views, and say no when not convinced, but he avoided open conflict.

Recounting the time he was summoned by PM Manmohan Singh to his residence on a Sunday in early 2008, Reddy writes in his autobiography, Advice & Dissent: My Life in Public Service, “He said, ‘Venu, the FM is very upset with you. I do not know what to do. I cannot be taking sides between Chidambaram and you’. I responded, ‘Sir, you have many worries… You please take care of your health. You need not bother about this problem. I will take care of my relations with the minister’.” Reddy adds he went straight to Chidambaram’s house, offered unconditional apology, and said he would keep in mind the need to be supportive.

Rajan & Patel: The outsiders

With his formidable reputation as IMF Chief Economist, Raghuram Rajan had really pushed the envelope as RBI governor, giving unsolicited advice to the Modi government on many occasions. On December 2, 2014, he had picked holes in the government’s flagship ‘Make in India’ programme. Rajan had cautioned against focusing on just one sector such as manufacturing, just because it had worked well for China. Again, while Cabinet ministers were revelling in talking up India as the fastest growing economy in April 2016, Rajan had said at a convocation address at the National Institute of Bank Management in Pune, “Speaking to a foreign journalist the other day, who asked what it felt like to be the bright spot in the world economy, I used the phrase ‘Andhon mein kaana raja (In the Land of the Blind, the one-eyed man is king)’.” Rajan had added, “As soon as we believe in our own superiority and start distributing future wealth as if we already have it, we stop doing all that is required to continue growing.”

When ministers expressed their anger, Rajan apologised, but only at the possibility of having offended the visually impaired with his phrase.

Some of Rajan’s predecessors note in private that many issues Rajan spoke his mind on were not in his remit. On February 20, 2015, still in the first year of the Modi government, Rajan, speaking on Democracy, Inclusion, and Prosperity at the D D Kosambi Ideas Festival in Goa, said he was discarding his RBI hat to speak as a professor on political economy. While not referring to the Modi government, he spoke of how strong governments may not move in “the right direction”. “Hitler took Germany efficiently and determinedly on a path to ruin, overriding the rule of law and dispensing with elections.” When the government had not extended Rajan’s three-year tenure, few had been surprised.

Sources say Jaitley preferred Arvind Subramanian, who was serving as Chief Economic Advisor, as Rajan’s successor. But Modi picked Urjit Patel, who had been Rajan’s deputy. Within two months, Patel faced the first challenge with Modi’s demonetisation decision. While past governors such as Jalan, Reddy, Subbarao as well as Manmohan Singh accused the RBI of not doing enough to mitigate public distress, Patel also had to face gruelling questions from parliamentary committees on the withdrawal of currency notes.

That Patel was bruised is evident from a mail he wrote to RBI employees on New Year’s eve. Referring to demonetisation, he wrote, “Let me emphasise that one thing we should all zealously guard is the integrity and reputation of our organization and any act belittling the same should deserve zero tolerance….”

This appears to have been the beginning of the souring of relations between Patel and the government. In June 2017, when the Finance Ministry sought to make a presentation to the monetary policy committee (MPC) ahead of its meeting on June 6-7, Patel asserted the central bank’s independence. On June 8, he told the media that the MPC had declined the ministry’s request.

When the RBI did not cut rates after this MPC meeting, Subramanian launched an offensive on the RBI’s inflation forecasting methodology — though forecasting is a dicey business. Bibek Debroy, Chairman, Prime Minister’s Economic Advisory Council, did try to work the backchannels between the government and the governor, but without much success.

Patel’s self-effacing mannerism also invited barbs from Mumbai finance veterans since he did not seek intelligence from outside. However, it also got him accolades from traditionalists for keeping market players at bay.

In the RBI ranks, Deputy Governor Viral Acharya is one person with whom Patel interacts frequently, an insider says. Some other deputy governors have apparently got replies in form of scribbles on note slips they passed on. “Every governor is different… You have to accept that,” says a former deputy RBI governor, who has interacted with Patel.

A circular on February 12, 2018, by the RBI also underlined the rift. In case of defaults Rs 2,000 crore and above, the circular asked banks to finalise a resolution plan, failing which insolvency proceedings were to be pressed against the defaulting company. This specifically affected power sector players whose projects were stuck for no fault of their own, such as late regulatory clearances and payment delays by distribution companies. While the government was keen that the circular be withdrawn, the RBI did not relent.

Over the following period, while official communication between the Finance Ministry and RBI collapsed, there were hardly any informal channels. The appointment of S Gurumurthy, a person with a strong political ideology, to the Central Board of the RBI in August, followed by the removal of banking expert Nachiket Mor, only left the RBI even more exasperated. The Board, stocked with stakeholders from different segments of the economy, had for long been a dormant body quietly nodding in agreement with the RBI. Not anymore. They persistently asked questions and even demanded reversal of decisions.

A source familiar with these developments said, while it is true that RBI has to take a long-term view, at times, it has to also check the weather of the moment. One example of Patel’s aversion to meeting market players even during crisis was his unwillingness to grant audience to the NBFCs facing a liquidity crisis, which brought the players knocking at the doors of the NITI Aayog and North Block. Gurumurthy demanded more credit and relaxation for the micro, small and medium enterprise (MSME) segment, which is a strong vote base of the BJP. He pushed for relaxation of the prompt corrective action framework that currently restricts lending by 11 banks since their financial parameters — capital adequacy, net non-performing assets and return on assets — had breached trigger points.

All of this formed the background to the RBI outburst late last month. On October 26, Deputy Governor Acharya publicly warned that “Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets…, and come to rue the day they undermined an important regulatory institution.”

A former RBI governor, who did not wish to be named, said if Patel was so frustrated, he should quietly step down as governor. Even before Acharya’s address, the Finance Ministry had invoked Section 7 of the RBI Act that allows the government to call for consultations with the governor as a first step on issues of ‘public interest’. If the RBI does not agree with the government post consultations, the Centre can issue a directive forcing the governor’s hand. The former RBI governor says Patel has placed himself in a piquant situation. “He can’t quit now having taken the war for independence and autonomy public, and staying on will require restraint not just on his part, but also the government’s.”

That doesn’t seem likely. On Friday, PM Modi announced cheaper credit to small businesses on fresh loans, explicitly using the fiscal instrument of interest subsidy to bypass the RBI, that is loath to MSME forbearance and relaxation of bank lending norms.

What next

‘Path dependence’ is a term often used in economics. According to the Financial Times Lexicon, it is an idea that decisions we are faced with today depend on past knowledge trajectory, and are thus limited by the current competence base. In other words, history matters for current decision-making situations and has a strong influence on strategic planning. India’s politics since 1984 with coalition governments at the Centre offers little guidance to the RBI on dealing with a government which came to power with absolute majority in May 2014. The government led by PM Modi believes in the concept of a strong sovereign — the nation’s sovereignty takes precedence over the autonomy of RBI and all other institutions.

But in the last three decades, as India charted an irreversible path of opening up to the global economy, salient aspects of the developed democracies such as accountability and respect for institutions are taken for granted. That be true, both Urjit Patel and Raghuram Rajan stand out in the post-liberalisation club of RBI governors. They are new to the entrenched and normatively stodgy bureaucracy of the government and also of the monolithic RBI.

This is a government that often wears power on its sleeve. Rajan’s reflections on political, social and economic issues struck discordant notes in the government. The best it could do was not extend his tenure. If Rajan spoke a lot, Urjit Patel is at the other end of the spectrum. He has developed his own language, and for most times, he lets his actions speak. The craft and tactfulness of the governor will, therefore, be tested as he seeks to preserve RBI’s authority, autonomy and independence vis-à-vis the government and its political imperatives in the months leading up to national elections.


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Governor & his governance
2018: Things To Come for Stocks, Cryptocurrencies, Gold & Silver – Mike Maloney

Happy New Year hi this is Mike Maloney and in this video we’re going to be taking a look at things to come not the 1936 film which was a great film by the way but we’re going to take a look at what might happen in the coming year and beyond in the financial markets and in the economy and when you’re trying to look into the future to predict what’s going to happen it’s best to do that by looking through the lens of history if you can find a similar set up to what is happening today and when that set up result if you can find something in the past and find how it resolved itself what the outcome was then the outcome is probably going to be pretty similar in the future as Mark Twain famously said history doesn’t repeat itself but it often rhymes and there will be a twist it will be a little bit different than last time around but it’s going to be quite similar and so this is the S&P 500 we’re going to be taking a look at this and there’s this great article that I was reading and I want to show you just how important this is it’s titled why a toxic mix of low volatility passive strategies and high levels of leverage is reason for caution in the US equity markets now I’m going to try and make this more understandable for everybody because one of the things they don’t do here is define things so they’re speaking to other people in the financial sector you know we want to know what volatility is we want to know what passive strategies are and we want to know what the leverage is that they’re taking and you know some people don’t know what equity markets are our equity markets that’s the stock market equities are stocks so could low volatility be the quiet before the storm if we go down here to the text low volatility could be the quiet before the storm so says dr.

Robert Shiller the Nobel prize-winning economist at Yale University adding I lie awake worrying over the past 20 years the volatility index has closed below 10 on only 21 days 13 of which have been in the past 2 months so that means only in in the whole 20 year period there there were only 8 other days that closed outside this window of 13 days being in the last two months and now I’m going to share something with you I’m updating an old article this is 5 months old and there was already something extraordinary happening five months ago and now we’ve got another it’s been a hundred and fifty days five months since he said all of this so where are we at today well let’s take a look at the volatility index now the volatility index is basically a measurement of greed and fear it’s a measurement measurement of investors being too worried when it spikes up at these really high figures when everybody thinks that there’s a crisis that’s gonna go on forever and to complacent where they think that tomorrow is going to be the same as today everything is going to be rosy and the stock market is going to rise forever now if you look at this minimum here but what how they derive this is this spread between options puts and calls on the S&P 500 and so they it closed eight of those days that he’s talking about we’re back in this 2006-2007 period and if you look at where the stock market was in late 2006 early 2007 it was just before this thing that’s called a distribution dome this is where you know Wall Street was invested going up here and then they start placing risky assets in the hands of the public and so the strong smart money moves all of the risky assets off of their books and sells them to the weak dumb money the average retail investor and then it’s that retail investor that gets slaughtered going for the ride down here and then that retail investor will panic and sell and the professionals buy it back and take the you know they start the next ride and so if you take a look at what happened with the volatility index here it went way up and it peaked in late 2008 here and so that corresponds with this dip right here so investors were really worried and they were over pricing the risk into the market thinking that the markets were going to continue falling to zero and this is exactly when that when that volatility index was peaking is when they should have been going long investing back in stocks and not selling and so the volatility index is a negatively correlated indicator this is when you should when everybody is is complacent and sure that things are going to go on perfectly forever that’s when you should be worried and when everybody is really worried that’s when you need to be bold and take some steps now I made the the as far as making a lot in a very very short period of time I positioned myself so that I would do well during this period of time and every single day I was doing very very well so it was as far as a short time period goes this was the densest accumulation of wealth that I’ve had so far was during that crash now you take a look at what’s happening today and this is just going up and up and up and there is no part of volatility is the markets going up and down there isn’t any volatility here and that shows in this dropping now when he wrote the article which was August 3rd that only encompasses a few days here so let’s take a look at a close-up of the volatility index so this just goes back to May when it first dipped below 10 so it’s the first time since 2007 that the volatility index had been below 10 and I’m gonna look at an area chart here because it’s a little easier to see he’s talking about the days that fall in the white area inside this rectangle that I’ve drawn so there were 13 days but what about all of this over here that’s what I want to count now how many days have been added to that 13 days and to do that I’m going to turn this into a dot chart which is incredibly difficult to read it’s a awful looking chart but I’m gonna zoom up on this area since September and what this allows me to do I’m gonna ignore this one dot that’s almost on the 10 line and just count the dots in here and what we end up with is there’s 33 more of them so now there are 54 days that the volatility index has been below 10 in the last 20 years and 46 of those days or 85 percent of them have been since May they’ve been this year and that is something that that can’t last it’s completely unsustainable and this trajectory of the markets is also completely unsustainable so let’s go back to this letter here the current streak of 270 plus days without a 5% drawdown in any of the major US indices is the longest since 1996 well there have been another 150 days so now it’s 420 days when this article was written the Dow Jones was just at 2500 so there’s all of this that has been added and you can see that there’s no pull backs there none it just goes up and up and up and it’s like total insanity and so back to the article meanwhile US equity values continued to diverge from earnings so Schiller’s cyclically adjusted p\/e ratio or cyclically adjusted P Cape has only been higher two times in the in market history 1929 and 2000 well he they don’t define for people what p\/e ratios are and that’s basically the price of a stock a share of the stock in the company divided by the earnings per share of that company and so how what kind of profits is that company having compared to the cost of each share of stock and it’s a very very good indicator and typically there is a fair value range and that is somewhere around twelve to fifteen times whatever the earnings are is what the price of the stock should be to be fairly valued so let’s go over here and take a look at it and this is dr. Robert Schiller’s data and what you see here is you know fair value being in this area right here and things have been out of whack for a long time but that’s even higher than twelve to fifteen but so this is an area where you can expect to do well on your stocks and if you buy them when they’re the p\/e ratios are very low stocks are very undervalued at these points and they do incredibly well if you purchase stocks in from nineteen eighty to eighty two and then took that ride to the year 2000 you did incredibly well that’s the type of bull market that you know with gold and silver I’m trying to invest in one of these long term bull markets and the bull market in precious metals is not over with and so in that article they said that it only been hired two times in history 1929 and 2000 well now we’re up at 29 levels or higher and so let me see here yeah we’re just past the 1929 levels or maybe just a little bit you know same or a little bit higher and there was only one other time the dot-com tech bubble the Nasdaq bubble of the year 2000 when stocks were more insanely valued than they are right now and just to point this out this is 2007 and this is the global financial crisis of 2008 the crash that just brought it back into fair value range but not into undervalued and so you know that this cycle is not done yet we haven’t visited undervalued whenever you go into a bubble you have to visit undervalue before a brand new bull market starts bubble undervalued bubble undervalued and it’s like that every single time except this past two decades and the Fed just keeps blowing us back up into these bubbles that’s going to end soon and I don’t think we’re going to have to wait very long evidence is beginning to mount that US equity markets may be near a volatility driven tipping point buoyed by the lowest interest rates in 5000 years now I got a stop here and let everybody know that 5000 years is all of financial history we don’t have measurements of interest rates before that the measurements we do have are very accurate going back a few hundred years but then they sort of get spotty here in their what they’re talking about the lowest interest rates in forever is what they’re saying that they’ve never been this low right now we have countries that represent one quarter of the world’s GDP the gross domestic output so all of the goods and services created in in the world countries that represent 25 percent of the world’s output have negative interest rates which was not even a concept until the year 2008 and the reason that it’s a concept and a tool that they’re using now is because we have these insane Keynesian economists running the global financial system they run all the world’s central banks and they think that this is a logical tool that they can use these negative interest rates to get an outcome that they want and it isn’t it’s it’s an insane thing to actually charge people for the privilege of loaning them currency for a period of time and had taken on the risk that that currency is going to be paid back and depreciated inflated currency or not paid back at all or they take a haircut or something like that where you get paid back less so you’re you’re taking on risk and when you buy bonds you know in the United States we don’t have negative interest rates but in a lot of countries they do right now and investors in those countries have to pay for the privilege of loaning somebody currency for a period of time that is insanity and that means that there’s still an extreme emergency going on and you know the outcome of this isn’t going to be pretty investors have taken on more and riskier leverage in search of yield now these low interest rates push everybody into riskier and riskier investments because you can’t buy a safe investment that’s going to pay you some sort of yield but here they’re talking about leveraged riskier leverage and low volatility would not be a problem if not for strategies that increase leverage when volatility declines so as that volatility goes down more and more certain funds and types of investments people have taken on more and more leverage to a greater you know when Bear Stearns failed their mortgage-backed securities were leveraged to where they had 3% equity so they were leveraged it was just enormous leverage if passive strategies have a bias to buy then they can also have a bias to sell now what are passive strategies passive strategies for investing is investing in indexed funds for instance an index fund like the diamonds or the spiders or the Q’s the diamonds are a fund that mimics the Dow Jones Industrial Average the spiders mimic the S&P 500 so if you buy a spider the spiders indexed funds you’re going to get performance that looks almost identical to this but there are lots of ones that are double long and triple long and even quadruple long so when this goes up ten percent say your fund that you’re invested in is going to go up twenty thirty forty percent depending on which one but when this drops ten percent your fund is also going to go down forty percent and these are run by black box trading that’s you know it’s it’s all computer driven and so with hundreds of billions of dollars of investments now linked to volatility a spike in the volatility index could trigger a devastating algorithmic sell cascade algorithmic they’re talking about black box trading that manages these funds that hundreds of billions of dollars are invested in and so as when the market turns and it starts to go down what they’re worried about here is black box trading triggering sell cascade so this is devastating algorithmic sell cascade means it’s a waterfall event the market goes down a little it triggers more selling which then is going to cause margin call when you have leverage you know investors that go out on margin when they leverage stocks you put 20% down and you get to buy five times more stock than you’re paying for and what happens is if that stock goes up 10 percent you make 50 percent profit if it goes down 10 percent you lose 50 percent but what’s going to happen long before you can lose 50 percent is that your brokerage house will come in and you will get what’s called margin call and you have to cough up the they’ll typically at around 12% or something like that they won’t allow the equity to go below that because now they’re beginning to take on risk and so you have to cough up extra cash for them to not sell your position you get it like 24 hours and if you don’t cough up that cash your position gets sold and so what happens is when people get margin call they will sell this stock or that stock on their trading platform and try and cover their position and bring their equity up to where it needs to be and when they sell that causes the markets to go down further which cause which causes more of these black boxes to sell yet even more so this devastating algorithmic sell cascade is what an investor in stocks should be worried about it’s better to turn cautious too soon then too late after the downslide has begun the lower the volatility the more risk investors are willing to or in some cases required to incur now when they where they say required that’s because the world’s central banks have created these this ultra low interest rate environment and there is if you want to be invested there’s no place that is actually safe the only things that I can see that are safe that are definitely undervalued are gold and silver and during a crisis like this investors are also going to run to other safe haven alternative investments you’re going to see bonds get a last pop that’s a standard safe haven but the alternative safe havens would be crypto currencies and precious metals so they’re going to do very well assets whose performance is linked to volatility include a huge amount of money any spike in volatility even to historic average levels has the potential to drive a significant amount of equity selling much of it automated that’s that black box selling that I was talking about such selling would in turn further increase volatility which would call for more deleveraging and yet more selling so that’s that waterfall cascade refusal to acknowledge the existence of risk has become a pandemic that is the VIX staying the low ten for so long it is just it’s there’s something really wrong with the markets and this is the amount of margin that investors have gone out on so this is an non commercial investors their net positioning and they’re way way out on margin right now at historic levels and when the stocks go down they have to cover meaning they’ve got to sell some of the stocks to come up with the currency to repay the brokerage house and so we’re gonna skip down to the end here seemingly every day for the past two weeks the VIX has set new records well those records go for another five months now as Goldman Sachs pointed out recently there have been 14 low volatility regimes since 1928 and all have required a large shock namely a war or recession to end them however quantitative easing and the rise of passive strategies means history may tell us nothing about what’s to come now are they saying here that that this time it’s going to be different that this time everything will be fine what they are saying here is that history that this has made things so much worse that this is going to be bigger than anything that history can teach us and the because the next sentence and the longer volatility remains suppressed the bigger the leverage bubble grows and the more costly the correction will be once the passive herd is spooked you know I’ve been expecting four years now and I’m usually early I mean I was early I’ll show you something here this is the Robert Schiller’s home price index and I started warning back in 2005 when it was up here the real estate was in a bubble and that investors needed to get out and it went all the way to 2007 so I was a couple years early before that bubble popped but here we are again real estate is also one of it back into a bubble and so you’ve got the everything bubble with stocks bonds and real estate and so this time you know in the year 2000 stocks crashed in 2007 it was stocks and real estate this time it’s going to be stocks real estate and bonds so it’s it’s this is the currency crisis that I have said is going to be coming before the end of this decade and we’re just about there I don’t know how long how much longer this can go because if you take a look at what’s happening now with the tax cuts and everything the markets are just in love with this so it could go a few more months but I have a feeling that before the end of this year that’s going to be a happy new year for precious metals investors because things like this always end in tears this look at the trajectory of this thing it cannot go on forever and the correction that’s going to happen this time with all the leverage that’s built into the system with all of these passive funds just tracking this is going to be pretty horrific for the average stock investor as Hyman Minsky once said the more stable things become and the longer things are stable the more unstable they will be when the crisis hits and that crisis is somewhere on the road in front of us it’s part of the things to come in 2018 could go out to 2019 but I doubt it very much it’s going to be a happy new year for precious metals investors and potentially cryptocurrency investors so if you’ve got anything from this video please like it share it with everybody that you can subscribe to our channel if you already are subscribed click that little bell next to the subscription button because that tells YouTube that you definitely want to hear whenever we’ve got another video that comes out you want to be updated on that and if you aren’t getting notification of new videos then go to our website goldsilver com scroll to the bottom and there’s a place to sign up for our newsletter just put your email address in there and and every week you’ll be notified when the next video comes out so thank you very much for listening good luck and we’ll

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Bitcoin. Bitcoin is text the majority of avid internet users has come to know, but few of us have come to truly understand. Bitcoin is a decentralized digital currency that works without a bank. You may have noticed from the many headlines over the latter part of 2014; Bitcoin is steadily increasing in price and some people have acquired A LOT of fund from it. But….how safe is it. Hello and welcome back to Life’s Biggest Questions…I am Rebecca Felgate and today I am asking: Is Bitcoin Safe to Expend In? Before I get right into the brass tacks details of this video, I want to remind you to leave thumbs up on videos you like and to leave remarks so we can continue our discussion. Also, to all of you who are new here, delight do feel free to move ahead and subscribe to our canal. Bitcoin was established in 2009 and allows people around the world to commerce via a cryptocurrency.

The creator of Bitcoin goes by the name of Satoshi Nakamoto, but of course, that is a pseudonym and nobody knows who that person actually as. Initially, people were sketchy about Bitcoin, perhaps due to the current lack of an accountable builder, and largely due to the link between cryptocurrencies and dose acquires on the dark web. Nonetheless, the world has changed since 2009, with more and more people examining the added benefit of a paperless , nonphysical money system as opposed to fractional reserve banking.

Now, over 100,000 shopkeepers accept Bitcoin as a shape of payment. These dates, the value of one bitcoin is skirting around the 17,000 dollar mark- at the end of 2013, a bitcoin was worth 1000 dollars, and at the beginning of 2011, it was worth only a dollar. With these kinds of highs…a lot of people are interested in vesting … but just how safe is it? – At this time I merely want to make it clear that I am in no way a crypto expert or fiscal psychoanalyst, I am exactly giving you some factual spotlights from hours of research on specific topics. So …. In numerous behaviors, Bitcoin is safer than residence your money in a bank or building society. For one thing, banks are notoriously corrupt, we have encountered countless banking crisis and meltdowns thing.

Bitcoins are in some ways most secure than currency very; you cannot forge a bitcoin like you can bank note. Similarly, unless you yield person your private key password to your bitcoin pocketbook, it is pretty difficult for someone to embezzle your money. Also, with the process of mining, public ledgers of all bitcoin transations are created…which means there is a digital account of every pay. Nonetheless, there are a few issues with the Cryptocurrency that are worth noting at this stage in the game.

One of the problems with Bitcoin is the hype. A lot of people are buying into the money for some kind of hipster street cred validation, which is a terrible reason to invest in something. The currency hasn’t yet stabalized, which is why we are seeing such massive rises and autumns in the importance over the past few months. With such wild shakes, it is difficult to append a goods to money appreciate, manufacturing trading with bitcoin, at the moment, anyway…a slight hazard. People are also feasibly concerned that the inflation froth will burst, leaving investors who joined at, suppose , 15 thousand dollars to the bitcoin, out of pocket If the importance gate-crashes back down to its earlier US dollar exchange rate.

The other issue with Bitcoin is that it is stored in online wallets. These billfolds have pin numbers and if you forget that pin number, you cannot access your money. Also, you cannot reverse a transaction. If you send your money to the wrong person, you can’t get it back. Banks have safeguards for wrong remittances, but Bitcoin doesn’t. There is no buyer protection.

The other potential probability when it is necessary to Bitcoin is that governments are suspicious of it, partly due to its chequered history with the stimulants marketplace and partly because they’re suspicious of tax evasion. Bitcoin is currently illegal in Iceland, Russia, China and is a big grey area in the United Arab Emirates. There are economists who have better understandings of crypto than I do, but thus far as I see it, Bitcoin has its pros and cons…its areas of safety and its the matter of peril. Right now, occasions certainly seem hot for bitcoin, and as we move into the future, I would imagine a cashless world to be a beneficial one…however the notion of Cyrpto needs to become a bit more tangible for it to truly take off.

Do any of you guys have a bitcoin? What do you think? Can you facilitate continue the debate in the comments section below? What do the rest of you think? Are you interested in expending? Tell me know…as honest, I would love to get a sense of what people speculate on this topic. For now, that’s all I have…I am your emcee Rebecca Felgate, delight do leave a thumbs up on this video and click on the notification buzzer to be the first to hear a big answer. I’ll catch you in the next video, but for now stand curious, stay alert, and never ever stop wondering. If you want to continue on your interrogating orgy, why not check out our biggest What Ifs Playlist and our Biggest Science Questions playlist ..

Is Bitcoin Safe To Invest In?
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