Alan's Finance Blog

Fed’s Currency Swap Lines: A BIG deal for the Dollar

The Fed met this week on monetary policy. It was a bit of a snoozer. What wasn’t a snoozer, however, was what they’ve included in their recent monetary policy statements regarding currencies.

Most market participants have been entranced by the Fed’s language about their target interest rates …

Will they say they’ll keep rates low for an “extended period” or not?

But the real story was buried in the last paragraph of the December Fed statement and reiterated in their latest statement.

Here’s what it said …

“The Federal Reserve will also be working with its central bank counterparties to close its temporary liquidity swap arrangements by February 1.”

Following the Fed’s statement this week, there was a coordinated release of comments from the European Central Bank, the Bank of England and the Swiss National Bank confirming that the swap lines were no longer needed.

For the currency markets, this is a big deal. Yet, few have thought the juicy details of the Fed’s plans on currency swaps are of interest.

But I do. I suspected it was a game changer for the dollar when I was studying the statement last December. And so far, the price action in the currency markets is confirming that.

Here’s a bit of background …

In September and October of 2008, the Fed announced that it would be opening temporary currency swap lines with central banks around the world in fixed amounts through April of 2009. As that expiry date neared, the Fed extended the period to October, and then extended it again until February of this year.

Here’s what that means: The Fed agreed to give foreign central banks U.S. dollars at a determined exchange rate for the currency of the respective foreign counterpart. And when the swap ends, the two central banks simply repay the same quantity of currency back. There’s no exchange rate risk and no impact on the demand for currency in the open market.

Why Did the Fed Offer Dollars to the Rest of the World?

When the credit crisis was at its peak, banks around the world were hesitant to do any short-term lending with other banks. As a result foreign bank-to-bank lending rates for dollars, the world’s primary business currency, shot up. That restricted access to dollar borrowing and pushed a lot of consumer interest rates higher in the U.S. and abroad.

By providing these currency swaps with other central banks, the Fed helped to inject dollar liquidity into banks around the world. And it was well needed.

In short, it was good for the global financial system because it helped reduce the fear premium that was causing market interest rates to soar.

You can see this clearly in the chart below. In panel A, while the Fed and other central banks were cutting benchmark interest rates to the bone (the white line), the Libor rate (the orange line), or the rates at which banks make short term loans between themselves, was going in the opposite direction.

Subsequently, when the dollar swap lines were rolled out, you can see in panel B how this divergence was reversed.

The Implication for Currencies

Most importantly for currencies, what these currency swaps did was increase the supply of U.S. dollars in the global markets — a negative drag on the value of the dollar.

So with the Fed announcing that it will close its currency swap lines with foreign central banks by February 1, the unlimited access to dollars by foreign central banks has come to an end.

This development is easily a positive for the dollar.

Let’s take a look at the timeline of these developments and the respective performance of the dollar …

As you can see from the chart, following the Fed announcement that the swap lines would be extended through October, the dollar has gone through a period of decline. Since December, when the Fed announced these facilities would be ending in a little more than a month’s time, the dollar has been on the rise.

When they opened these massive swap lines in late 2008, the goal was to alleviate the dollar liquidity crunch at banks around the world. However, in the process they increased the supply of dollars around the globe — a negative consequence for the value of the dollar. But now that these lines will be closed, it’s clearly a dollar-positive development.

And with the weight of evidence leaning in favor of the dollar at this stage, as I laid out here in my article last week, this latest announcement by the Fed provides more reason to believe in this dollar rally.

Regards,

Bryan Rich

Weekly Fundamental Outlook for Energies and Metals – Worries about Contagious Sovereign Risk Damped Sentiment

Macroeconomic events were the focus of last week and strength in USD put commodity prices under pressure for the second week. The USD index gained +1.5% last week as concerns about sovereign default triggered selloff in risky assets and demand for safe USD and JPY. Reuters/Jefferies CRB Commodity Index slid -3.6%.

Although the Greek government outlined a 3-year plan to cut its deficit, currently at over 12% of the country’s GDP, to below 3% of GDP as required by EU, the market doubted its effectiveness. Greece’s 5-year and 10-year government bond yields rose +12.4% and+14.95, respectively. At the same time, the 5-year and 10-year credit-default swap surged to 3.73% and 3.4% respectively last week. These suggested investors are increasingly concerned about the ability of the country to contain its debts without helps of EU and other countries.

At the World Economic Forum in Davos, the People’s Bank of China reiterated its goal as to curb inflation and to maintain stable RMB. Although the government said it will ‘continue with current accommodative fiscal and monetary policy’, the market still expect it will step up the tightening policy. If China is to limit lending and unwind the stimulus measures, it’s definitely harmful for global economic recovery. China’s economy expanded +10.7% qoq in 4Q09. The IMF forecasts the country will continue to lead world growth this year.

In the January World Economic Outlook, the world lender raised its forecasts on global GDP growth to +3.9% in 2010, compared with previous estimates of +3.1%, se driven by robust growth in emerging and developing economies. China will continue to be the locomotive with annual growth rates of +10% this year.

US GDP expanded +5.7% qoq in 4Q09, the strongest pace in 6 years, with inventories contributing +3.4% to growth. Although the stronger-than-expected reading lifted commodity prices, gains were soon erased due to lack of follow-through and strength in USD.

Other events happened last week include FOMC and RBNZ’s announcements to keep their policy rates unchanged, Obama’s first State of Union address in which he stated job creation will be the number 1 priority in 2010 and Bernanke’s confirmation for a second term as the Fed Chairman.

Crude Oil

Despite brief rebound to 74.82 after release of strong USD GDP, crude oil price dived to 1-monht low at 72.43 amid rally in USD. The benchmark contract ended the week at 72.89, losing -2.2% on weekly basis and recorded the third consecutive weekly decline after surging to 83.95, the highest level in 15 months, in the beginning of January.

Fundamentals in the US energy market remain weak. The US Energy Department reported crude oil inventory dropped -3.89 mmb to 326.7 mmb in the week ended January 22. Cushing stocks also drew-0.69 mmb, the 5th consecutive weekly decline. We believe the main reason for the huge decline in crude stocks was the closure of the Houston Ship Channel, which serves the largest US petroleum port, shut for 2 days because of fog. It was reopened on January 21. Also, the oil-tanker spill in the Sabine Neches Waterway has led refiners to cut back production. We expect to see another draw next week as the oil spill is still impacting imports.

Both gasoline and distillate rose +1.99 mmb to 229.4 mmb and +0.36 mmb to 157.5 mmb respectively. Demand for gasoline edged slightly high on weekly basis but the level at 8.619M bpd remained below last year’s level. Beware that last year’s demand was very weak as it was in the midst of the worst of economic crisis. Distillate inventory built modestly compared with market exception or a draw. Imports surged +142%, on weekly basis, to 0.658M bpd, the highest level never seen since 2006. Demand dropped -2.6% to 3.725M bpd during the week. The level was still -12.5% below last year’s level.

In coming few years, oil demand will be heavily relying on growth in Asian market. According to the International Energy Agency (IEA), preliminary data indicated that China’s total oil demand soared +16.4% yoy in November, driven by both government spending and supply disruption due to cold weather. Demand is anticipated to have increase +7.2% to 8.5M bpd in 2009, followed by a +4.3% rise to 8.8M bpd in 2010. China takes up almost 10% of world oil demand and that’s why market sentiment has deteriorated dramatically after China guided yields higher, increased required reserve ratio and limited bank lending. The market worried that the growth engine will lose momentum this year.

Other than China, India is another hot spot. Total oil demand probably rose +5.4% in 2009, followed by another +3% this year. Robust oil consumption in India was driven by gasoline demand which, in turn, was due to strong car sales.

Natural Gas

Settling at 5.131, natural gas tumbled -11.8% last week. Macroeconomic uncertainty, anticipation of warmer weather and a return to surplus were hurting gas price. According to the US Energy Department, gas storage dropped -86 bcf to 2521 bcf in the week ended January 22. At current level gas inventory was +120 bcf higher than the same period year and +87 bcf (+3.6%) higher than 5-year average. The benchmark contract for natural gas slid for 4 consecutive days from Monday to Thursday, losing almost -12%.

Rally in gas price over the past few weeks attracted more supply. Baker Hughes reported that the number of gas rigs rose to 861 units in the week ended January 29. This was the highest level since March 2009. The US Energy Department believes that supply disruption, driven by the huge plunge in rig counts during from mid-2008 to mid- 2009 will be reflected later this year.

Precious Metals

Although gold price seemed to have found temporary support around 1075, the benchmark contract slid -0.5% last week following a -3.6% decline in the prior week. Strength in USD and shift of demand to PGMs weighed on the yellow metal. In the near-term, gold should remain under pressure as the dollar will probably be boosted higher by sovereign risk problems in Greece. In fact, investors are very much concern about the Greek fiscal problem will be spread to other European nations. Greek bonds and CDS showed that investors are increasing worried that the EU will not assist the nation to come out of debts. The euro plummeted to as low as 1.3861, the lowest level since July 2009.While we believe the EU and IMF will eventually offer some kinds of financial supports to save Greece from going bankrupt, the problem will remain a drag for the euro, and hence gold.

Silver, a metal that is more leveraged to global economic recovery, was sold heavily over the past 2 weeks. Closing at 16.19, the benchmark contract for silver lost -4.3% last week, In fact, silver has been in a downtrend and has corrected -12.3% over the past 3 weeks.

Platinum also declined in tandem with other commodities. However, recovery over the past 2 days signaled near-term support was seen at 1483.1. Palladium showed similar pattern. Although the benchmark contract retreated -6.2% last week, buying interest emerged around 400/410. We anticipate stronger rebound next week.

Source: Oil n Gold

Bernanke’s Burn Notice – Why Now? Research Reveals Insight Into Fed Chairman’s Popularity

By Elliott Wave International

Like a spy who gets a burn notice, Federal Reserve Chairman Ben Bernanke has suddenly lost his support.

Bernanke has gone from being Time magazine’s Man of the Year in 2009 to … what? A Fed chairman embroiled in a controversial reconfirmation process before U.S. Congress. Why the sudden turnaround in his fortunes?

Robert Prechter, president of the research firm Elliott Wave International, has written about the history of the Fed and its chairmen several times over the years, and his research shows that their popularity rises and falls with social mood, which is measured by the stock market. Here is a compilation of excerpts from Prechter’s monthly market letter, The Elliott Wave Theorist, from 2005-2009 about the trouble he sees brewing at the Fed.

Can the Fed Stop Deflation? Robert Prechter answers this all-important question in his Free Deflation Survival Guide. The guide gives you a 60-page ebook that will help you understand deflation and its effects on society; you’ll even learn how to survive and prosper in such an environment. Download Your Free 60-Page Deflation eBook Here.

(November 2005) The Coming Change at the Fed | Public figureheads have a way of representing eras. This is certainly true of entertainment icons and politicians. The history of Fed chairmanship implies a similar tendency for changes of the guard to coincide with changes in social mood and therefore stock prices and the economy. [The chart below] depicts our social-mood meter—the DJIA—since the Fed’s creation in 1913, marked with the reigning chairmen according to a list on the Fed’s website.

The first chairman, Hamlin, presided over a straight-up boom. As it ended, Harding took over and presided over an inflationary period that accompanied a bear market, exiting just as a new uptrend was developing. Crissinger took over at the onset of the Roaring Twenties, and Young presided over the boom, the peak and the rebound into 1930. Meyer took over just as confidence was collapsing and left the office in early 1933 at the exact bottom of the Great Depression. The next three chairmen struggled through the choppy years of the 1940s. Then Martin presided over virtually the entire advance from the early 1950s through 1969, exiting just before the recession of 1970. Burns and Miller presided over a bear market and exited as the new uptrend was developing. Volcker, after weathering an inflation crisis, presided over the explosive ’80s. Greenspan has presided over the manic ’90s and the topping process. [Ben Bernanke] will have his own era. Given the eras that have immediately preceded the coming change in leadership, the odds are that this new environment will be a bear market.

(June 2006) Economists are convinced that the Fed can “fight” inflation or deflation by manipulating interest rates. But for the most part, all the Fed does is to follow price trends. When the markets fall and the economy weakens, the price of money falls with them, so interest rates go down. When the markets rise and the economy strengthens, the price of money rises with them, so interest rates go up. The Fed’s rates fell along with markets and the economy from 2001 to 2003. They have risen along with markets and the economy since then. Regardless of the Fed’s promise to keep raising rates, you can bet that the price of money will fall right along with the markets and the economy. Pundits will say that the Fed is “fighting” deflation, but it will simply be lowering its prices in line with the others.

It is highly likely that the next eight years or so will test the nearly universally accepted theory—among bulls and bears alike—that the Fed can control anything at all. The Great Depression made it look like a gang of fools, as will the coming deflationary collapse. We have predicted unequivocally that the new Fed chairman will go down as Hoover did: the butt of all the blame, and if you are reading the newspapers you can see that it’s already started. “When Bernanke Speaks, the Markets Freak” (San Jose Mercury News, June 10, 2006); “Bernanke is being blamed for spooking Wall Street” (USA Today, June 7, 2006); “Bernanke to blame for volatility” (Globe and Mail, Canada, Jun 13, 2006). The new chairman had a brief honeymoon (which we also predicted), but it’s already over.

By the way, I heard his commencement speech at MIT last week, and in it he spoke eloquently of the value of technology and free markets. But he also opined that economists have successfully applied technology to macroeconomics. We believe that the collective unconscious herding impulse cannot be tamed, directed or managed. In our socionomic view, the Fed cannot control the mood behind the markets, but rather, the mood behind the markets controls how people judge the Fed. We’ll ultimately find out who’s right.

Can the Fed Stop Deflation? Robert Prechter answers this all-important question in his Free Deflation Survival Guide. The guide gives you a 60-page ebook that will help you understand deflation and its effects on society; you’ll even learn how to survive and prosper in such an environment. Download Your Free 60-Page Deflation eBook Here.

(December 2009) Bernanke’s greatest achievement was not the measly $1.25t. of debt that he arranged to have the Fed monetize; it was convincing the government to shift the burden of debt default from the speculators and creditors to taxpayers.

(September 2009) Thanks to the Fed Chairman and two Treasury Secretaries, profligate bankers have been cashing checks off the Fed’s and the Treasury’s accounts, and the poor savers and taxpayers who fund these institutions are unaware that their personal bank accounts are being tapped by counterfeiters and thieves.

That lack of awareness may soon change. Declining social mood is fueling the drive to expose the Fed’s secrets. [Ed. note: Bloomberg News has sued the Fed under the Freedom of Information Act; Congressmen Ron Paul, R-Texas, and Barney Frank, D-Mass., are leading a charge to audit the Fed.] Exposing the Fed’s secret deals could lead to scandal and the collapse of major money-center banks. But most important to our monetary outlook, it will serve to curb the Fed’s reflation efforts. As I have written many times, deflation will win. Social mood is impulsive and cannot be stopped. The downtrend will claim its victims by whatever measures it must take to do so.

(August 2009) On July 26, in a speech in Kansas City, MO, Fed Chairman Ben Bernanke declared, “I was not going to be the Federal Reserve chairman who presided over the second Great Depression.” (WSJ, 7/27) We think this implication of a fait accompli is premature. Clearly, the Fed Chairman and the majority of economists are of the opinion that the worst of the financial crisis is past and that the Fed’s unprecedented lending has averted deflation and depression. But wave 3 down in the stock market will dispel these illusions. Years ago, we suggested that Chairman Greenspan quit if he wanted to keep his lofty reputation. He didn’t do it. Now Chairman Bernanke should consider this option.

So will Bernanke serve a second term as Fed chairman? The January 2010 Elliott Wave Financial Forecast says, “Social mood is still too elevated to deny Bernanke reappointment as head of the Fed. … But rising political tension confirms that his next term will be far more stressful than his first.”

Can the Fed Stop Deflation? Robert Prechter answers this all-important question in his Free Deflation Survival Guide. The guide gives you a 60-page ebook that will help you understand deflation and its effects on society; you’ll even learn how to survive and prosper in such an environment. Download Your Free 60-Page Deflation eBook Here.

Gold, Silver, Platinum…W.T.F.?

Brad Stafford here in place of Adam Hewison and I have a great new video for you. I’m sure many of you read that title and your mind went in the gutter, but today I’m going to show you a whole new meaning for this acronym and how it applies to gold, silver, and platinum.

These three markets have a lot of volume, government implications, and technicals lining up for potentially great trades. Gold makes a record high, then pulls back. Silver is inching towards an all-time high level and platinum is making people rethink their decision to go with a white gold wedding band.

Where do you stand in these markets and maybe more importantly, where should you stand?

Click here to find out what W.T.F. really stands for and what does it have to do with gold, silver, and platinum?

You’ve got to watch the video to find out.

http://www.ino.com/info/503/CD3336/&dp=0&l=0&campaignid=3

Brad Stafford
Director of Marketing
INO.com & MarketClub

Where should YOU be in the S&P 500?

Hello this is Adam Hewison and I’ve just returned from my daughter’s wedding in New Zealand to see that we have some very interesting markets to start the New Year.

In today’s short video we take a fresh look the S&P 500 and what we think it is going to do in 2010. We will also be looking at an important “Trade Triangle” that has just flashed an important signal for this index.

http://www.ino.com/info/507/CD3336/&dp=0&l=0&campaignid=3

As always our videos are educational, free to watch, and there’s no need to register. Enjoy the video and please feel free to leave your comments on our blog.

http://www.ino.com/info/507/CD3336/&dp=0&l=0&campaignid=3

All the best to you in 2010,

Adam Hewison
President, INO.com
Co-creator, MarketClub

Weekly Fundamental Outlook for Energies and Metals – US/China Policy Uncertainty Weighed on Commodities

The commodity sector got hammered last week as investors worried that overheating in China and US’ bank proposal to curb risk-taking would reduce demand for higher-yield assets. The Reuters/Jefferies CRB Index dropped -2.1% to 275.56, the lowest level since December 22.

Crude Oil

WTI crude oil slid -2% to close at 74.54 Friday in reaction to US’ plan to limit trading banks. Energy demand in the US and China is also at risk of slowing down. The front-month contract plunged for more than -10% over the past 2 weeks.

The US President Barack Obama proposed restrictions on risk-taking at financial institutions. The plan includes limiting the size of financial institutions and to ban some ‘risky’ activities including proprietary trading and internal hedge funds. The news damped investments for risky assets such as commodities and equities.

Having waited for 5 months, investors received the CFTC’s proposal on positions limits on energy contracts (physically settled and cash-settled futures in light, sweet crude oil, Henry Hub natural gas, and New York Harbor gasoline and No. 2 heating oil) on January 14. The purpose of limiting positions is to curb speculations of large banks and swaps dealers in oil, natural gas, heating oil and gasoline markets.

According to the Commission, the aggregate limits are set by formula based on open interest. The AMC speculative position limit would be 10% of the first 25,000 contracts of open interest and 2.5% of open interest beyond 25,000 contracts. The single-month position limit, in turn, is set at 2/3 of the AMC position limit. The position limits would be calculated off of the prior year’s month-end open interest.

Only very bigger positions holders will be affected by the limits and the CFTC showed that 3 unique owners in crude oil market and 1 in the natural gas market were affected during the period from January 1, 2008 to December 31, 2009. However, more traders in heating oil and gasoline markets were restricted.

Apart from the policy side, fundamentals suggested crude oil price should remain within a range of 70-80 in the near-term. Released Thursday, the US Energy Department reported crude oil inventory drew -0.47 mmb to 330.6 mmb in the week ended January 21. Utilization fell to 78.4% for 81.3% but decline in demand was offset by higher reduction (-4%) in imports. Draw in distillate stockpile more than doubled consensus forecasts as extremely cold weather last week raised heating oil consumption. Demand rose +5.8% to 3.823M bpd while production plummeted -10%. Despite the draw, distillate inventory remained +17% above normal. However, gasoline stockpile rose +3.95 mmb to 227.4 mmb as driven by -1.5% drop in demand to 8.602M bpd.

Last year, rally in crude oil price hinged on robust demand growth in China. Indeed, demand in the country was strong as indicated by oil imports which gorse +1.6M bpd yoy in December. The Chinese government reported economy grew +10.7% yoy in 4Q09, the fastest pace since 2007 in 4Q09. For all of the year, the economy grew +8.7%, exceeding the official target of +8%.

However, the data did not send energy prices higher. Instead, the expansion raised worries about further tightening in the world’s third largest economy. We believe Chinese demand in the near-term may slowdown due to policy tightening. However, in the longer-term, imports will pick up again as underlying fundamentals in Chinese economy stays strong.

Natural Gas

After rising on Thursday and Friday, gas price added +2.2% last week. According to the US Energy Department, inventory drew -245 bcf to 2607 bcf in the week ended January 22, sending total gas storage -0.2% below 5-year average. Colder-than-expected weather in the US increased gas consumption. As weather returns to normal in coming weeks, we believe demand will reduce and so will supply. For most of the time In 2010, imports from Canada will weaken while production will be lower than last year as the impact of -60% decline (from peak to trough through September 2008 to July 2009) in rig counts feeds in. However, LNG imports will ramp up rapidly. Over the period of 2010 and 2011, LNG investments such as Yemen, Tangguh and Sakhalin projects will raise total capacity significantly.

Precious Metals

Gold price tumbled amid profit-taking and broad-based decline in commodities. The benchmark contract for gold plummeted -3.5% to close at 1090.8 last week. Although the yellow metal has fell -6.2% from recent high at 1163, we still see further downside risk, particularly as February and March are weak months seasonally.

PGMs slumped Friday. Platinum dived to 1521.1, the lowest level in more than 2 weeks, before recovery. The metal lost -3.2% over the week. Palladium ended the week with -1.7% decline. Price slipped to a 1-week low of 425 Friday before buying interest emerged. However, rebounds after the sharp fall indicates underlying demand for PGMS remain strong.

In China, imports for platinum and palladium grew +115.7% yoy and +215% yoy, respectively, in December. China overtook the US as the bigger auto market by sales in 2009. At the same time, it also surpassed Germany as the largest car exporter last year. With global auto market anticipated to recovery rapidly in 2010. We believe import s of PGMs for auto-catalysts will rise further.

ETF investments in PGMs remained firm last week. According to ETF Securities, platinum holdings in European and Australian Trusts pulled back to 433.2K oz (-17%) in the week ended January 2010. Holdings in the new US ETF surged to 149.9K oz during the period, from less than 10K oz in the first trading week. For palladium, holdings in European and Australian Trusts declined -4.7% to 648.2K oz while that in the new US ETF rallied to 209.9K oz. Holdings in the first trading week was also less than 10K oz. We improved fundamental outlook and strong ETF investment should boost PGMs prices this years.

The CFTC will hold further hearings in March to discuss about position limits on metal markets. We do not think this would dampen metal demands. As metals are non-perishable and easier to store, restrictions on financial markets will direct investors to physical market investment.

Base Metals

Speculations on further monetary policy tightening in China weighed on base metals and the complex recorded broad-based decline last week. Copper proved to be the most resilient metal in the complex with only modest drop of -0.5%. China trade data showed that net refined copper import rose +26% mom in December. At the same time, the country’s inventory slid -3.3% to 97308 metric tons from the previous week. These evidenced China’s demand for the metal stays strong.

LME contract (3-month delivery) for lead plunged -8% to close at 2237. Last, we saw rapid rise in lead production in China. Producers stockpiled plenty of lead scrap in 2008 amid weak price and they released the scrap to the market in 2009 as price recovered markedly. This had led to significantly increase in secondary production of lead. We believe the phenomenon will continue in the first half of 2010 but should turn better in the second half. Therefore, we should be prepared for further weakness in lead prices in near- to medium-term.

Source: Oil n Gold

Can A Forex Robot Beat 2,000% Per Year?

Hi.

This is probably one of the (if not THE) most important forex related post I will make for quite some time to come…

Pay close attention!

Forex Megadroid… the most accurate, consistent and profitable robot on the market is soon increasing its price (in my opinion, they should have done it a long time ago!)

For almost 10 months, the robot has been the #1 best selling robot on the market (since its launch on March 30th, 2009).

As we both know… you don’t get to be the #1 selling robot for so long just because of good marketing… you stay on the TOP only if you are good!

And good doesn’t even begin to describe Forex Megadroid…

As far as I know, this is the ONLY robot that for the past 10 months has been tracking its performance on a DAILY basis on their website.

You can see what I mean here:

http://www.forexmegadroid.ca

By the way… when they launched almost 10 months ago, they set a performance objective for 2009.

That objective was 1,000% net profjt.

How much did they actually achieve (updated on a daily basis on their website throughout 2009)?

Well… how about OVER 2,400%!

You can see past trade-by-trade results on their website and remember, those trade results were updated on a daily basis since the site went live… no marketing gimmicks, no B.S. for almost 10 months!

And yes, results still are (and ALWAYS will be) tracked and presented on their website on a daily basis:

http://www.forexmegadroid.ca

Ohhh… by the way, you have GOT to see their new proof (on page 5)… that is a true “never done before” on the Internet case study!

What is this new proof all about?

Well… simple and to the point: a trader has been using Forex Megadroid consistently since April 30th, 2009 (still is and will be for a very long time to come!)…

Now, this guy has proven once and for all that it’s all about sticking to what is good and not jumping from one bot to another.

Not only has every single month been profitable for him… but his equity curve is like nothing I have ever seen in the past!

You can check it out here:

http://www.forexmegadroid.ca

All the best,

Alan

P.S. Remember – Forex Megadroid’s price is going UP to $149 in a few hours… this is the best robot on the market – hands down, so make sure to grab one while you can still get it at the current totally bargain price.

http://www.forexmegadroid.ca

Forex Robot Proves Daily It Doubles Your Money

Hi,

==>Some claim they have the best Forex robot… ONLY ONE PROVES over 10 months that their’s actually IS the best Forex robot (documented on a daily basis).

Ok…

There are practically 100’s of Forex robots in the market… and one thing is common to 99% of them.

So what is it? If you have been around for a bit, you already know:

Most are “come and go” robots… meaning, they launch one week, gone the next week. Why? Because they are… well… you know the word

Forex Megadroid launched almost 10 months ago (March 30th, 2009) and IS still the best selling robot on the market today.

Why? Because it WORKS!

Listen, you can spin it however you want but, bottom line, the only reason a Forex robot remains the #1 robot on the market for so long is because of its performance. PERIOD.

Now…listen closely:

Forex Megadroid’s price is going up to US $149 soon…

How soon? Well, check the counter here (depending on when you got this email, it might be a few minutes or a few hours away):

http://www.forexmegadroid.ca

Forex Megadroid is the only robot in the market that:

Has had shown performance of 2,270% in 2009

Has TRACKED that performance on its website DAILY (by visiting the website every day since March 30th, 2009, you could have seen the performance of the robot update… and, of course, you will be able to see it for months and years to come)

Has had every single month (since launch, almost 10 months ago) turn out a profitable month

Has an equity curve NEVER seen before in the industry

Has PROVEN to quadruple every dollar deposited

Has PROOF of a 9 month account (continuing!) trading with unheard of performance

Is the ONLY robot that recovers from a loss so FAST (you HAVE to see this – never achieved in the industry before)

You can see proof of all the above here:

http://www.forexmegadroid.ca

—————————————————————
The ONLY Robot That Has Live Updates… DAILY!
—————————————————————

When Forex Megadroid launched on March 30th, 2009 they came out with a statement:

“Will we be able to reach the 1000% profit objective for 2009?”

They posed it as a question… they decided that VISITORS could be the judge based on daily updates of the robot’s performance.

Can you see the difference between these guys and the rest???

These guys are the first ones in the industry to say they will reach unheard of profit objectives AND at the same time show the progress on their website!!!!

Now… not only did they show performance on a daily basis, they BROKE their objective of 1000% net profit for 2009… they actually nailed over 2,200% (again, performance ALWAYS has been and always will be updated on a daily basis on their website)!

BEAT THAT!

The robot’s price is soon going up (as you can see from the counter on their website) so make sure you grab a copy of the best robot in today’s market here before that happens:

http://www.forexmegadroid.ca

There is a difference between a forex robot that appears for the first time on the market with exaggerated claims… AND a robot that has proven its claims on a daily basis for over 10 months!

All the best,

Alan

Deflation in Everything But the Cost of Living

By: Adrian Ash, BullionVault

Well, this is a pretty pass. Deflation in all things except inflation…

THEY WERE SUPPOSED to avert depression. The Bank of England continues to tout their “success”.

But it looks like the best that money-printing and zero rates might now deliver is ’70s-style stagflation, plus ’30s-style wealth destruction and a glacé cherry on top.

Giving Britain its “stag” – as in stagnation – are economic output, wages, capital investment, real estate prices and now, perhaps, a return of the bear market in London shares. Whether or not GDP shows an uptick for the end of 2009, this is the deepest British recession since 1931. Business investment sank to a 6-year low on the last quarterly data, and the number of people out of work for 12 months or more has risen by two-thirds since Northern Rock was bailed out, breaking the dam of bail-outs worldwide in late 2007.

Stepping in with a very 21st century version of drowning, not waving, “The number of people in part-time employment increased by 99,000 to reach a record high of 7.71 million” between Sept. and November ‘09, says the Office for National Statistics. “There were 1.03 million employees and self-employed people working part-time because they could not find a full-time job…the highest figure since records for this series began in 1992.”

Growth in the money supply, meantime – while not quite negative, as in the technical definition of deflation – has slumped to a 5-year low. But not without the Bank of England’s best efforts, remember…

Giving us a whole heap of “flation” to add to our “stag”, interest rates at 0.5% – plus quantitative easing of £200 billion…almost entirely used to finance the government’s record peace-time deficit – just saw the cost of living jump at its fastest pace ever on the UK’s official measure.

Recession AND inflation? Wasn’t deflation in all things except the cost of living supposed to be impossible…in the same way that “pass through” from Sterling’s fastest-ever decline on the currency market wasn’t supposed to show up in prices but only in export sales…?

High Street inflation on the Consumer Price Index leapt last month from 1.9% to 2.9% year-on-year. The older, more trusted Retail Price Index has now reversed its 4% slump of late 2008 to stand near new all-time record highs, while the RPI excluding mortgage costs (neatly slashed on the official data, if not by High Street lenders) rose 3.8% from a year before in December, returning to levels last seen during the commodity-price surge starting in 2006.

Exclude house prices, in fact – only half-way through their typical post-bubble slump – and UK inflation just reached a two-decade high outside the oil-price spike of summer ‘08. UK wages, in contrast, crept 0.7% higher in the year to November, the latest official data claim, but the average hides the horror. Because in the private sector – as opposed to the printing-press fueled state sector – wages actually fell, shrinking 1.0% on average for the 12 months to December from a year earlier.

Now factor in the cost of living for workers not closing a house-purchase last year (i.e. almost everyone), and that handed a net loss of purchasing power of almost five pence in the Pound to workers outside the state.

Things are equally gruesome for those folk trying to save for retirement or drawing an income from what they put by in the past. The cost of living in Britain has now doubled inside 21 years, and for the second-half of this “Great Moderation”, bank savings rates struggled to stay ahead of inflation. Thus the latest data only confirm what savers and retirees buying gold guessed back when the financial crisis began.

Their getting killed might not save the housing market, nor yet save the banks. But the Bank of England is happy to slit their throats regardless.

Monetary policy did nothing for Britain’s housing-market turnover in 2009. The number of new house-buyer loans was unchanged from 2008, holding 60% below the approvals peak of 2006.

But with the rate of inflation jumping last month – and set to jump again after VAT returned to 17.5% on New Year’s Day – the average discount mortgage (if you can get one…which you can’t) is now, at last, cost-free when you account for the cost of living. Tax-free cash ISA accounts, in contrast, have been paying less than zero after inflation since June 2008.

Expect policy to continue favoring home-buyers and spending over retirees and savers…even as home-buyers and spenders suffer net deflation in their incomes. Everyone loses as we revert to all bust and no boom, baked into the crust by parliament’s Keynesian consensus and the Bank of England’s executive faith in the power of money-supply inflation to redeem the economy.

The Old Lady created twice as many Pounds in the last 10 months as the entire UK money-supply grew by in the first 11 months of 2009, the excess going to overseas bond-holders to finance the government’s record peace-time deficit. Naturally, the value of Sterling has dropped as its supply has swollen, both against other currencies and gold bullion. But any hope that the new inflation data might see cash savers benefit from rising interest rates – let alone the end to quantitative easing scheduled for next month – looks premature.

Swap Sterling for gold…? It worked for nine years last decade, and that was before stagflation struck…back before the Bank of England began printing money to finance the state, and looking for all the world like it’s actively bidding to destroy the Pound.

Adrian Ash

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

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.

Gold & Silver Bounce vs. Falling Dollar as China’s Monetary Tightening “Runs to Stand Still”

By: Adrian Ash, BullionVault

London Gold Market Report

THE PRICE OF GOLD regained a third of yesterday’s 2.5% plunge in London dealing on Wednesday, bouncing as the US Dollar eased back and Wall Street futures pointed higher from Tuesday’s 1.0% drop.

By the time New York traders reached their desks, gold priced in Dollars stood little changed from last week’s close at $1137 an ounce.

US crude oil contracts meantime dropped below $80 per barrel as Asian stock markets closed sharply lower, catching up with Tuesday’s late announcement from the Chinese central bank that it’s raising the amount of cash commercial banks must keep in reserve to 16% of deposits.

Domestic lending in China – now the world’s No.1 private consumer of physical gold – grew 32% in 2009. Local reports, quoted by the London Times, say an extra $86bn was lent in the first 5 days of this month.

“The central bank has to keep running to stand still,” reckons UBS economist Tao Wang, because surging exports are sucking more money into China’s economy.

Tuesday’s move doesn’t signal “any sort of serious monetary tightening” overall, he’s quoted by Australia’s FNArena.

In the global gold market, “The news from China’s central bank triggered a wave of selling,” says Tokyo fund manager Tetsu Emori at Astmax Co., speaking to Reuters.

“But the market still looks a bit overbought after active gold buying by index funds, especially at the start of the year.”

Virtual Metals’ new Precious Metal Investment Weekly for Fortis Nederland Bank shows a net increase of almost 0.2% in bullish gold investment on developed-world exchanges for the first week of Jan.

Speculation in US and Japanese derivatives contracts outweighing a slight pullback in gold ETF trusts.

New York’s SPDR Gold Trust – the world’s largest gold ETF – shed another four tonnes of metal to back its shares on Tuesday, reducing the fund’s hoard to its lowest level since mid-Nov. beneath 1116 tonnes.

Silver investment positions also grew by 0.2% last week, the VM Group consultancy says in its new weekly report, as institutional futures trading added to a 20-tonne increase in silver ETF trust-fund holdings.

“With gold pushing lower we are seeing very good physical demand coming through,” says Walter de Wet at Standard Bank in London today.

“As a result we expect the metal to remain well supported around the $1114-$1120 level, but we are also seeing good selling above $1130.”

Ahead of India’s spring wedding season, culminating with the Hindu calendar’s third most auspicious festival – Akshaya Thritiya, falling this year in mid-May – “relatively low prices could prove a good buying opportunity” for jewelers needing to restock their inventory, says one wholesale dealer.

Gold imports to India, formerly the world’s largest private consumer market, fell 18% in 2009 the Bombay Bullion Association said today.

Down to 343 tonnes from an already depressed 420 tonnes in 2008, gold imports rose sharply in December, the BBA notes – up from three to 34 tonnes as 2009 ended.

“Indians are slowly getting used to high gold prices, and that should sustain demand,” says Angel Commodities Broking’s Amar Singh to Bloomberg from Mumbai.

“There’s a consensus that gold will stay high because of inflationary pressures and a weakness in the Dollar.”

Both the Euro and British Pound rose to their best levels vs. the Dollar in four weeks, despite news of a worse-than-expected drop in UK manufacturing output and a full 5.0% contraction in Germany’s economy during 2009.

French, German and Italian investors now Ready to Buy  Gold saw the price trade below €778 an ounce – more than 3.0% beneath Monday’s assault on last month’s all-time highs.

The gold price in Sterling dropped 3.5% from Tuesday’s five-week high, hitting a 6-session low beneath £700 an ounce.

Silver priced in Dollars meantime rose 20¢ per ounce to stand little changed for the week-so-far at $18.43.

UK investors wanting to buy silver saw the price drop 4.5% from this week’s three-decade high.

Western government bonds meantime ticked lower as European stock-markets held flat after yesterday’s drop, pushing 10-year US Treasury yields up to 3.74%.

The Obama White House said today that last year’s $787bn stimulus helped save two million US jobs.

The House of Representatives last month approved an additional $155 billion package for government jobs creation.

Federal Reserve bank presidents Charles Plosser and Richard Fisher – neither of whom now vote on US monetary policy – said in separate speeches last night that unemployment will not decline until late 2010, but the central bank must still beware the “inflationary pressures” of leaving interest rates at zero.

In an interview with The Guardian published today, Bank of England policy-maker Andrew Sentance notes that although “there will be quite a lot of spare capacity and slack to take up” in the UK economy, “that is not the only influence on inflation.”

“Inflation didn’t fall as sharply as people expected last year, and in the short term it is going to go above its [2.0%] target,” says Sentance, calling the UK’s £200bn ($320bn) Quantitative Easing a Success.

UK inflation was last pegged at 1.9% per year on the Consumer Price Index. It hit 2.7% annually on the Retail Price measure ex-mortgage repayments.

Base Rate has been held at 0.5% since March last year. The gold price in Sterling has risen 9.0% since then, hitting a series of all-time record peaks above £700 an ounce.

Adrian Ash

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

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.