Tuesday, November 18, 2008

Show us the Money?-- IFCN Wk 50 –Tue- Equity: $1,529.10

So--- we've all heard about the billions of dollars given to banks to improve liquidity and to ease the problems with getting money back in the the financial system, via either loans or credit guarantees.

What don't we see any of that money showing up anywhere that could do any of us some good?

There is a term people need to begin understanding- “quantitative easing”. (Hint: Japan has been doing this to their money supply since 1999-- and the main reason that the word "carry trade" is on the brain of almost all forex traders.)

It is an intentional action to force huge money reserves into the banking system with the expectation that banks will eventually exchange those assets for higher-yielding assets. What if the banks just decide not to make those exchanges?

The very real risk is that the banks bestowed with all the money fail to lend the excess reserves to businesses and consumers, which only extends the frozen credit that is threatening recession in the world's major economies.
The so-called excess reserves have jumped to $363.6 billion from $2 billion in August as the Fed added to its emergency lending programs.

When and if that money starts showing upin the economy, the markets will have a chance to get back to some version of normal. It could be a wait.

If you want to understand what the Fed is doing, in his own words (Governor Ben S. Bernanke) ..., check this out! It is incredibly enlightening!


The week's only FirstStrikePlus trade:
  • Eur/Usd: Long @ 1.2723, stop 1.2508.
FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete rule-set for effective trade management.

Trading account equity: $1,487.10

Silver position equity: $42.00
(Current XAG price: $9.61 – 200 unit position average: $9.40)
TOTAL Equity: $1,529.10

See you tomorrow---

Joel Rensink

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Hotmail or Yahoo addresses. They've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

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