The problems of the dollar - this is good news for the markets in Europe

Almost all predicted the dollar fall. He has even fewer friends than a passenger aircraft, which during the flight is suspected sick swine flu.

Investor and owner of billions of dollars in George Soros (George Soros) said that this situation creates a "dangerous instability. IMF Managing Director Dominique Strauss-Kan (Dominique Strauss-Kahn), indicates the appearance of a new global world's dominant currency in the decade.

The reasons are simple: the U.S. economy is in bad shape, the Fed prints money wildly, the budget deficit out of control.

It is hard to believe that in five years the dollar will have the same dominant role he had on global markets after World War II.

The depreciation of the dollar in Europe is often seen as a threat. In fact, all exactly the opposite: the end of the dollar's dominance will increase the importance of the European economy.

Evidence of problems of the dollar, we can see everywhere. The Organization of Petroleum Exporting Countries continues to mutter about the need to abandon the dollar in transactions with the oil and switch to one or more other currencies. This may not happen immediately, but it would be naive to believe that this will not happen in principle.

Central banks are beginning to revise their views on how much of their stocks to keep the dollar, particularly because the Fed does not stop the printing press. For example, India, has just bought gold at $ 6.7 billion from the IMF to diversify their reserves. Expect many such transitions, especially from new emerging economies in the coming years.

The end of
Objective debate about the end of the dollar's dominance has not yet happened. After WWII the U.S. became a strong economy. Now they - one of several powerful economic blocs. There is no reason for the U.S. to occupy a special position.

An interesting question is what the consequences. The gradual decline of the dollar - another source of instability in the world, in which it and so abound. The depreciation of the dollar in Europe and the rest of the world - is an opportunity to strengthen its own economy.

There are three reasons for this.

First, the primacy of the dollar allowed the U.S. to cope with a much larger trade deficit than any other country could afford, not leading to the collapse of its currency. It was a kind of tax that was levied with the rest of the world and allowed the U.S. to consume more and save less than they should, at a time when other countries were forced to save more and consume less.

"Tax" dollar
Because Europe is richer in other countries, this tax is mostly paid by Europeans. Any tax cut stimulates the economy, so the end of the tax dollar will do the same for Europe.

Secondly, the decline of the dollar will inevitably stimulate the global trading volatility, since only the special status of the dollar makes a huge U.S. trade deficit is acceptable. This should reduce the imbalance in trade between the U.S. and China. It will also reduce a massive trade surplus in Germany, as the strong euro complicates the sale of goods abroad. Even with the rapid growth of China, Germany remained the largest exporter of goods in the world in 2008. If China will assume this role in the near future, Germany could begin to consume and import more, which should benefit the whole of Europe.

Finally, we do not know what will replace the dollar. "Gold bugs" (supporters of preserving the functions of monetary gold) insist on their candidate, and maybe they will win. But most likely it will be the basket of currencies. One of them will be the Euro. The euro zone is currently the only strong economy, with the right amount of liquidity to meet the dollar.

Free Loans
For that to be a reserve currency to pay the price. Your Bank should worry about the consequences of its policies in the context of the whole world, not just the domestic economy. Of course, there are advantages. In fact: the rest of the world gives you an interest-free loan. And your currency is stronger than might.

With its aging population, Europe is the greater part of the next 30 years will live on their capital. With so many retirees, the region will be required to spend more than it saves. A stronger euro makes imports cheaper than those things that work force has ceased to produce.

Most of us do not like change, and people have a tendency to hold on to something with which they are familiar much longer than it was viable. But the dollar's dominance as the global reserve currency, is complete. And although Europe has to fear, there are also things which you can enjoy.


Lynn, Bloomberg
November 18

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Prospects of the American economy

Caroline Baum, an analyst "Bloomberg News"

As the holidays ahead of us waiting, and trade gradually melts away, now is the time to look forward. For the U.S., there are still two prevailing and diametrically opposed views.
The American economy is in a beautiful form, or is about to reach peak and go down. Household balance sheets are also either in good shape, or so strained that require a serious reduction in consumer demand.

The U.S. Dollar has made a very welcome and should be reduced or are on the verge of collapse, which will send increasing yield Treasury bonds and the global economy into a tailspin.

So, what happens?

For the inexperienced observer, the economy, growing at 4% with unemployment at 5.4% and inflation (core CPI), to 2%, is quite good. And even if our observer knows that the economy experienced a series of shocks, starting with the rupture of one of the biggest in the history of the stock market bubble and the collapse of business - investment and subsequent terrorist attacks, corporate scandals records, two wars, the price of oil for $ 55 and various concerns related to the presidential election, it will be even more impressed.

Return the double deficit

However, not all so simple! How about growing deficits (fiscal and current account) and reduce savings rates? The savings rate fell to 0.2% in October, that far from the historic minimum. The government had a record budget deficit of $ 413 billion in fiscal year 2004, which ended Sept. 30. And current account deficit, which is the broadest measure of trade, including goods, services and investment income, rasshirevshiysya to a record $ 164.7 billion in the third quarter. If you evaluate it as a percentage of gross domestic product, the gap fell to 5.6% in the last quarter, slightly away from the record second quarter to 5.7%.

Anyone who wants to find a precedent for such a fulminating mixture, do not need to delve too far into history. Last time, the double deficit was the reason that the "regulation includes the dramatic fall of the dollar (1985-1987gg.), The collapse of the stock exchange (1987) and, ultimately, the decline of American economy (1990g.)," the economists write "Barclays Capital Group "in its review of the global economy in 2005.

This is not the main scenario - at least not in 2005. Chief U.S. economist Henry Villmor said the forecast for sustained economic growth at around 4% and "balanced" monetary policy contraction.

Many risk

"There are many risks, which could lead to" adverse financial developments in 2005. And problems later, "said Villmor. The "bad", he means "Reduced sale of Treasury bonds, the emergence of problems on the stock market and housing, leading to a decline in general welfare."

Bond, suffering from large deficits, a weaker dollar and the five increases in official rates, refused to fall. The yield on ten-year Treasury bonds is about 50 basis points lower than it was when the Federal Reserve start to raise the target rate on a daily credit of 1% at the end of June. Exchanges of shares are also higher.

"If inflation begins to threaten the tolerance values of the Federal Reserve comfort zone - from 2% to 3% for the base consumer price index, the policy-makers will have to leave the" balanced "approach to the normalization of rates and, in fact, put a cross on economic growth," said Villmor .
This can result in cheaper sale stoic on the bond market. The dollar may fall as well as foreign investors will seek compensation for the erosion of real returns. Domestic investors can ignore the low yield in the face of fiscal policy initiatives that could expand the budget deficit in the short term.

Wealth savings

The growing housing market may finally release the steam, due to higher interest rates, which the (or promoted, depending on how you look at it), reducing the savings rate.
Net household reached a peak in the first quarter of 2000., Fell and did not exceed the previous peak until the fourth quarter of 2003. Since the third quarter of 2004., Households have shown increasing its net worth at 3 trillion. $ To peak bubble and a 7 trillion. Minimum of $ 2002.

"Yes, the savings rate of income reduced," said an economist from the "Citigroup Inc." Bob DiKlemente. "It will run its course. The savings rate will rise, but it will be gradual and over a long period of time, as interest rates and other incentives to change."

Profit as the basis

DiKlemente do not agree with the idea that economic growth has been artificially supported by highly supportive monetary and fiscal policy, and that after the removal of incentives, the growth will slump. Instead, he sees a "stream of mergers and acquisitions and rising short-term business - loans will be the early sign that the business ceases ostorozhnichat.

Recent data from small businesses - the November index of the National Federation of Independent Business - has shown that optimism is consistent with the 30-year peak set in 1983. Small business hiring plans reflect the strengths of staff and record levels of capital investment.

"Leading figures associated with the strategies of growth rose sharply," said DiKlemente. "This is yet another sign that the risks are reduced." The optimistic outlook DiKlemente long supported increasing the rate of return of non-financial corporations.

"No significant decline did not begin with improving profit margins," he said. "Rate of return affects the way in which business perceives the future." It sounds as if the optimists and the pessimists are talking about the same economy. The only thing with which they agree - is that a lot of bad things can happen in the next year.

If these things do not happen, the pessimists only moved its forecast for 2006.



Forex Magazine
based on www.bloomberg.com

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Sound Reasoning in the financial markets

Market movement is unique, each subsequent movement of prices is not like previous.

I would like to make their arguments on the financial markets and to give his assessment of forces that have a significant impact on the movement of prices in the financial market. The task that I put in front of you, above all, is to maintain sound value judgments about the risks and opportunities when working in the financial market. Each investor, who came on the market, aims to make money and not lose the opportunity to invest next time that it was well earned. The Art of stable earnings in the financial markets to become a myth for some other reality.
While the financial markets for a long period of time and analysis of scientific prominent investors, I have come to the conclusion that money, and lose, the market really, with a probability of 50 percent. Sometimes you wonder why I, a man who devoted much time studying the market, people who are constantly engaged in trade and practical analysis of movements in prices took a neutral position, not arguing that money for ryke easily and effectively, or conversely, what to do money out of money - the challenge is unreal. And all simply because I believe that everyone at heart, or in its essence is born with some talent, that is, each of us, you, I or someone else has some hidden talent, or in another capacity, which are disclosed in the course of life.
By continually over the life of the party to which a person is, he can succeed faster than others, in this, and it is expressed by the art of individuality, each of us is a creator, but it is in fact what he knows. I dare to say that if you are now reading this article, then surely you have something inside that led you to it here. Therefore, I would like to congratulate you and say that you're on the right track.
I sincerely wish that everyone who reads this article has such a talent that would enable him to earn a professional in the market and successfully carry out financial transactions. But even if you do not get it today do not feel pain and failure. Because it can always do for you more.
There is a very interesting pattern, if you're doing a very long one in any case, sooner or later you will realize that you know much more than others. Perhaps, in this hidden secret of the success of every professional - ongoing work on the case which you are interested. Why do I say this in this article, and why I'm not even talking about this topic. In life there are times when it is not feel like working on for the represented purpose, it seems now I have so many did, but no results, gradually interest in the case that you are doing, begins to disappear and then people begin to seek a new deal more interesting at the moment . The result of all this is the ability to work in many cases little, but not in the case that started. Therefore, people who love their work on the law are professionals and are getting big goals in the chosen specialization. Thus is born professionals - people love their business, people who year after year, becoming smarter and more purposeful in the chosen specialization.
I think the right to assume that you are also standing on the right track because the financial markets and all that this is linked to your professional interest. I think that in ten years if you continue to enhance the study of finance, you will very wealthy and successful among the other investors.
Having such a small logical digression, I would like to go directly to the topic for which I began this article, and in particular independent reasoning successful acquisition of capital and loss of capital at work in the market with real money. When I enter into a transaction, I make financial transactions and try to adequately talk about that work with real tools for financial or stock markets is safe, and make it as easy as simply walk into the store for shopping. When someone claims to lose a considerable amount of money in the market that make the market does not really express and confirms exactly what he had lost a considerable amount of money, if not all paying attention to real examples of other successful investors and traders . I, in turn, loan the article neutral simply sensible teacher who will show you both the positive and negative sides of the market, but to earn a losing, or giving a professional money manager - is a personal matter for each, guided by the factors I quote.
There is a very interesting statement, which reads: Rich immediately invest, then spend, while the poor just spend the remaining funds to invest. So as soon as there are rich free money, it looks for ways to invest, in order not to lose and multiply money. Invest the money could be anywhere ranging from real estate to their own bed mattress, where no one ever finds your hard earned money. If a person inexperienced in the subject of investment, it just gives money under professional management, certainly not a big percentage, but it will not be thinking about what a report on unemployment and how to publish the Americans proreagiruet to this message market, because they rotate and my money. Give the money an investor can, in principle, consider that you are done, but what happens in reality. No doubt the investor is well qualified that by law allows him to call a professional. These professionals are rarely lose money, but profits are typically obtained by these professionals, will be divided between you and the bank or investment fund. So, get your money grow if you feel like doing their business. Of course, there is a likelihood that an investor may lose some small part, but it did not happen as often as professionals always know what to do in this or any other situation.

There are people who do not trust their money to people on a number of strange set of reasons. In this case, it is possible to offer another version of a financial investment, in particular, to form their investment package. The successful formation of the package could allow to obtain large profits or lose money. The key point in this case is possession of information to investors and the proper use of this information in financial transactions. In this case, the likelihood of getting more profits increased beyond this, and the risk of loss of capital is also increasing. Many are at such risk, and then either become professionals in their case or lose money in the market and go away forever, arguing that the money market is very difficult and even impossible for some.
A typical situation is how it all began: the market has come a trader, brought hundreds of green, of course he came in the hope of earning and saving time starts. It takes some time, a trader in a hurry make mistakes, which in turn leads to a loss of capital, he starts to panic and immediately seek aftergame do not think that if the market went against the first time and stop-loss record, it is possible that no long-run trends and market consolidation. Making a few deals - no deposit, a trader disappointed hopes, and their dreams of wealth evaporate into the heavens. As a result, he begins to argue that the money market is not realistic, what is it, strictly speaking, and human, as he showed it in practice.
Now we can see several views and principles. First - where real people make money in real time. Second - when fans try to make their own money and do gradually grow up to the professionals and the third are the losers. As a conclusion of this article can be said that, at the place you put yourself and to reach. Each initially gave me a place in the world, such as the loser does not think about how to achieve success, he simply sees the causes and results, not breaking the intermediate stage of success, consistent training, he loses. Professional immediately understood that in this life is not given immediately, and small pieces, so it slowly climbs to the summit. But it will stay there for a long time and still be able to help one person get there. But an amateur and will be continually engaged in the full enjoyment by investing some amount, losing and gaining, but its purpose will be to obtain aesthetic pleasure.




President AlMaz Group Inc.
Alexander M. Mazurkevich

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