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Death to Forex

globalintelhub's picture




 

The Forex market is dead and dying, in parallel with the US economy; which is fitting, considering the US is still the world reserve currency.  

Significant harbingers that have changed the Forex market forever:

For those readers who believe this is all part of a 'conspiracy' to issue in a one world currency, read the following Kissinger transcript post Nixon shock (in part):

Secretary Kissinger: But if they ask what they’re doing—let me just say economics is not my forte. But my understanding of this proposal would be that they—by opening it up to other countries, they’re in effect putting gold back into the system at a higher price.
Mr. Enders: Correct.
Secretary Kissinger: Now, that’s what we have consistently opposed.
Mr. Enders: Yes, we have. You have convertibility if they—
Secretary Kissinger: Yes.
Mr. Enders: Both parties have to agree to this. But it slides towards and would result, within two or three years, in putting gold back into the centerpiece of the system—one. Two—at a much higher price. Three—at a price that could be determined by a few central bankers in deals among themselves.
So, in effect, I think what you’ve got here is you’ve got a small group of bankers getting together to obtain a money printing machine for themselves. They would determine the value of their reserves in a very small group.
There are two things wrong with this.
Secretary Kissinger: And we would be on the outside.
Mr. Enders: We could join this too, but there are only very few countries in the world that hold large amounts of gold—United States and Continentals being most of them. The LDC’s and most of the other countries—to include Japan—have relatively small amounts of gold. So it would be highly inflationary, on the one hand—and, on the other hand, a very inequitable means of increasing reserves.
Secretary Kissinger: Why did the Germans agree to it?
Mr. Enders: The Germans agreed to it, we’ve been told, on the basis that it would be discussed with the United States—conditional on United States approval.

 

Secretary Kissinger: They would be penalized for having held dollars.

These are not very sophistocated guys, according to the transcript (Conspiracy Theorists are encouraged to read the FULL transcript), but it does give credibility to the rumor that Arthur Laffer explained economic policy to Dick Cheney and Donald Rumsfeld in a bar by drawing a half circle on a napkin.

So, how does the Death of Forex have an impact on my portoflio?  How is this information valuable to me, and not just for Fortune Cookies?

1. If you are considering participating in Forex, or are already doing so, and you are a US Citizen or live in the US, consider setting up something outside of US, legally.

2. If you are a portfolio manager, hedge yourself from a potential collapse of your domestic currency.  There are plenty of high quality articles on Zero Hedge that outline this, just remember that if the US Dollar collapses it may be orchestrated with the ECB, now being run by an American trained MIT alumni, so if the USD goes down it doesn't mean exactly that the EUR will go up.

3. If you are investing internationally, be sure to hedge your Forex position with forwards, options, and avoid huge bank spreads that can be as high as 14% of your total transaction (up to 700 pips per side).

4. Unless you are forced by circumstance, or are extremely intelligent, experienced, and sophistocated, DO NOT INVEST IN FOREX, especially with 3rd party 'managers' that boast consistent usually unrealistic returns.  

5. Stay out of cash as much as possible, a big Forex market event can create hyperinflation, or even black market rates as we've seen in Argentina and India, or make the use of currencies in certain venues difficult or prohibited.

A final thought, about the biggest players in the world's largest market by volume.  Germany is the economic backbone of the Eurozone and thus the Euro.  Euro is currently the only alternative to the US Dollar, and US Bond market.  Here's a passage about the banking culture in Germany, with their most important FX banks:

The Commerzbank Tower is 53 stories high and unusually shaped: it looks like a giant throne. The top of the building, the arms of the throne, looks more decorative than useful. The interesting thing, said a friend, who visited often, was a room at the top, peering down over Frankfurt. It was a men’s bathroom. Commerzbank executives had taken him up to the top to show him how, in full view of the world below, he could urinate on Deutsche Bank. And if he sat in the stall with the door open …

 

Urinals pissing on DB

 

Just a thought, considering the current cases against the FX trading banks, maybe it would have been better, in hindsight, to instead invest in some dynamic model for FX.  But every organization reaches it's ultimate level of optimization, in the case of this Forex environment, it involves the excretion of one of the few products we can all agree that Germany does well (beer), and is combined with the alleged manipulation (cheating) of FX dealers.   It paints a sad and surreal death to the modern Forex market.  

 

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Tue, 01/21/2014 - 13:26 | 4351912 madtechnician
madtechnician's picture

Bitcoin will kill the FOREX

Mon, 01/20/2014 - 12:07 | 4348254 Bahamas
Bahamas's picture

FORE(nsic)x

Mon, 01/20/2014 - 11:34 | 4348156 Da chief
Da chief's picture

There's only one guy to watch / follow in the Forex Biz that being Forex Kong at www.forexkong.com

 

With everyone talking about the "death of the dollar" etc.....that just makes for some amazing forex trading no?

When trading a forex pair....for every pip one currency "loses" another must gain so......I can't understand why more people aren't jumping on this as an opportunity as opposed to some kind of punch in the face.

Open a forex account, and plan to get short USD when the time comes - Boom!

Mon, 01/20/2014 - 11:27 | 4348134 snowman
snowman's picture

ZH - I know it's a slow news day, but this should have never passed your bullshit filter. 

Mon, 01/20/2014 - 11:10 | 4348091 Tall Tom
Tall Tom's picture

Yes. Those arrogant fuckers with that Men's Restroom???

 

That picture needs be plastered all over the Internet. They believe that we are sewage to be disposed of at their pleasure, worthy to be pissed upon.

 

FUCK THEM.

Mon, 01/20/2014 - 10:34 | 4347961 Fuh Querada
Fuh Querada's picture

Tell that to "fuc to market".

Mon, 01/20/2014 - 10:23 | 4347939 BeetleBailey
BeetleBailey's picture

This article makes no sense.

Mon, 01/20/2014 - 13:27 | 4348448 Michigander
Michigander's picture

Yes it does. Forex trading in the US is dying. Dodd Frank limits the margin  from a global average of  500 to 1 down to 50:1. Dolt and Fagg must protect us from ourselves whie the vampire squid banks get to leverage 1000:1 on their fucking derivatives. I dont want a bail out. Just let me fucking trade!

The better global brokers don't take Amerikans. FINRA, FATCA, and all the other reporting bullshit don't ya know.

To gain access to a real broker, I spent thousands to open an offshore business in Nevis and banking in Canada, all to sidestep this US fucking reporting nonsense. I still have to report, but the broker doesn't.

Mon, 01/20/2014 - 09:38 | 4347831 rsnoble
rsnoble's picture

Beer Good!

Mon, 01/20/2014 - 09:39 | 4347829 MFLTucson
MFLTucson's picture

 

Secretary Kissinger: But if they ask what they’re doing.................................................................................. The man who ruined America.
Mon, 01/20/2014 - 08:58 | 4347774 mvsjcl
mvsjcl's picture

Yep. No way possible to manipulate the Forex market. No way, no how, never happen.

Mon, 01/20/2014 - 04:04 | 4347600 Yenbot
Yenbot's picture

Uh, forex works both ways. Short, long. So just make sure you're on the right side of your trades, eh? WTF death.

Mon, 01/20/2014 - 03:13 | 4347565 disabledvet
disabledvet's picture

there just aren't a lot of dollars out there and what few there are are being hoovered up by a huge energy boom and commensurate surge in the chemical industry. cloud computing, info tech, rapid prototyping, open source "everything", revolution in the materials space with scaled composites. combine solar batteries with handheld fuel cells and I think a lot of "overhead heavy" everything is about to be taken out. the last ten years has been all about the Army...the next ten will be the Navy. in short "there's your jobs program."

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