(US) BARRONS COMPARES THE RECENT MARKET SELL OFF TO THE FEBURARY CORRECTION; IN ORDER FOR THE MARKET TO RISE FROM THE RECENT DECLINES IT MUST SHOW THAT IT DOES NOT NEED THE CONSTANT PROMISE OF LBOS AND DEBT-ENABLED SHARE BUYBACKS TO HOLD IT UP - BARRONS
- Both sell offs came after the Dow approached new highs
- Positive catalysts for the overall market include a potential increased focus on strategic mergers (rather than LBOs) or the big brokers closing their August quarters without any balance-sheet "blowups" emerging.
<SPY>

Fundamental and Technical analysis is the name of the game here. Please do not clutter up the board with trade entries or how many pips you made this week.

What do I want to see? Weekly price point projections, fundamental factors that will affect the pair in the coming week, trend determination techniques etc...

If you're not trading GBP/JPY right now you need to start. This is an incredibly volatile pair capable of making you a bundle or being stopped out in a hurry. Money you lost getting stopped out can be made back the same week if not the same day. Let's get together and analyze it, for fun and profits.

Fundamental and Technical analysis is the name of the game here. Please do not clutter up the board with trade entries or how many pips you made this week.

What do I want to see? Weekly price point projections, fundamental factors that will affect the pair in the coming week, trend determination techniques etc...

Sorry to disappoint you there Glancy. I tell you what ... i'll change your cat litter just this one once. Last time I checked I have balls .. big balls. In fact I was givin them a nice lickin this afternoon. I will catch you on the next one.

Good trading all!

Point taken. Because the market moves so fast and because many of us don't have iHub open all the time, there must be a way to send alerts to the persons that need to get them quick. There are many good alerts here but we see them after all is said and done.

Is there an alert service out there for individual traders? Is it a mailing list program?

Then again status quo is good also.

I hope you all don't mind seeing my million posts of the trades i'm making.

Why don't you start a trade journal and just post the link instead of posting each and every trade.

Just a suggestion.
Ultimatepick

I invited the FXInsights people :

http://www.fxinsights.com/forums/showthread.php?p=1284#post1284

When I say they are good I mean they are covered in terms of the market moving against them because they are there to stop the trade ... lol!

Ataglance .... sounds good for inviting them to the friendly competition. Congratulations we are in the top 10 sorted by participants ... lets get more people in this!

https://fx2.oanda.com/mod_perl/fxcontest/fxcontest.pl?rm=listContests&sortCriteria=2


ps. could i put some strawberry jam on that peanut butter sandwich?

Capitalist, you are a champ. I love it when you get all gizzed up. I posted the ridiculous numbers to see how you guys would react .... as expected. These boneheads don't know what they are talking about sometimes.

If this dude knew so much about forex trading then why not trade and make millions of dollars instead of earny dinky money teaching this stuff.

Cap, what he is saying makes sense in essence though right?
I would love to make a proper charts with percentages.
Maybe someday.

The vein on your forehead can stop being bulgy now thanks.

Don't use stocks as an example ... apply it to forex.
This is how I see it ... think of it as a ratio.
For a standard lot.
A 10 pip stop loss=100 bucks
A 50 pip stop loss=500 bucks

10 pip stop = %10 accurate = $10 000 profit

50 pip stop = $42 accurate = $50 000 profit

If your stop is 5 times "bigger" you are MORE ACCUARATE and you make 5 times the money.

The lesson in all this? The bigger the stop the better your chances of success UP TO A CERTAIN POINT!
If you go over 5 times your usual stop your accuracy does not go up by much.

Now the question is:
What are the dollar amounts he talking about right?

I have no clue LOL!
He is just making the point of using larger stops (maybe 5 times your usual!), make for more successful trading.

IF YOU DON'T RISK THE PROPER AMOUNT ON EACH TRADE YOUR LOSSES WILL ACTUALLY INCREASE. (from being stopped out all the time)

FXINSIGHTS does not use stops and I am beginning to see why they are successful. Of course if your are goin long JPY crosses and the market takes a dump like last february you NEED TO put a stop ... but these dudes follow the market 24/7 so thay are good.

5 Common Trading Myths Debunked

http://www.thetradingauthority.com/promo/5MythsVid/

If you increase your stop from $100 to $500 your accuracy rate goes from %20 to %50!!
From 20000 to 50000 profit!

You cannot save setting with this. What I did was open a demo, downloaded the windows software and went to view - charts. This way you can save the settings.

My URL is in this form http://ifx3.it-finance.com/CBFX/itcharts.phtml?uid=??????

It might expire after 30 days. Open a demo here :
http://www.cbfx.com/demo_registration.htm

http://www.cbfx.com/charts/chartsdemo.htm

Advanced FX charts provided by:
IT-FINANCE

NOTE: IT-Finance charts are now available only through
our trading platform.

WHAT a bummer! wHAT WILL WE DO?? I need my crutch.

The Invasion of Iraq: Dollar vs Euro

Re-denominating Iraqi oil in U. S. dollars, instead of the euro
by Sohan Sharma, Sue Tracy, & Surinder Kumar
Z magazine, February 2004

http://www.thirdworldtraveler.com/Iraq/Iraq_dollar_vs_euro.html



[It is all about the petro dollars! It would be interesting to see what Russia and China thinks about all of this]



What prompted the U.S. attack on Iraq, a country under sanctions for 12 years (1991-2003), struggling to obtain clean water and basic medicines? A little discussed factor responsible for the invasion was the desire to preserve "dollar imperialism" as this hegemony began to be challenged by the euro.
After World War II, most of Europe and Japan lay economically prostrate, their industries in shambles and production, in general, at a minimum level. The U.S. was the only major power to escape the destruction of war, its industries thriving with a high level of productivity. In addition, prior to and during WWII, due to extreme political and economic upheaval, a considerable amount of gold from European countries was transferred to the U.S. Thus, after WWII the U.S. had accumulated 80 percent of the world's gold and 40 percent of the world's production. At the founding of the World Bank (WB) and the International Monetary Fund (IMF) in 1944-45, U.S. predominance was absolute. A fixed exchange currency was established based on gold, the gold-dollar standard, wherein the value of the dollar was pegged to the price of gold-U.S. $35 per ounce of gold. Because gold was combined with U.S. bank notes, the dollar note and gold became equivalent, which then became the international reserve currency.
Initially, the U.S. had $30 billion in gold reserves. But the United States spent more than $500 billion on the Vietnam War alone, from 1967-1972. During these years, the U.S. had over 110 military bases across the globe, each costing hundreds of millions of dollars a year. These expenses were paid in paper dollars and the total number given out far exceeded the gold reserve of the U.S treasury. By then (1971-72), the U.S. Treasury was running out of gold and had only $10 billion in gold left. On August 17, 1971, Nixon suspended the U.S. dollar conversion into gold. Thus, the dollar was "floated" in the international monetary market.
Also in the early 1970s, U.S. oil production peaked and its energy resources began to deplete. Its own oil production could not keep pace with growing home consumption. Since then, U.S. demand for oil continually increased, and by 2002-2003 the U.S. imported approximately 60 percent of its oil-OPEC (primarily Saudi Arabia) being the main exporter. The U.S. sought to protect its dollar strength and hegemony by ensuring that Saudi Arabia price its oil only in dollars. To achieve this, the U.S. made a deal, some say a secret one, that it would protect the Saudi regime in exchange for their selling oil only in dollars.
Throughout the late 1950s and 1960s the Arab world was in ferment over an emerging Nasser brand of Arab nationalism and the Saudi monarchy began to fear for its own stability. In Iraq, the revolutionary officers corps had taken power with a socialist program. In Libya, military officers with an Islamic socialist ideology took power in 1969 and closed the U.S. Wheelus Air base; in 1971, Libya nationalized the holdings of British Petroleum. There were proposals for uniting several Arab states-Syria, Egypt, and Libya. During 1963-1967, a civil war developed in Yemen between Republicans (anti-monarchy) and Royalist forces along almost the entire southern border of Saudi Arabia. Egyptian forces entered Yemen in support of republican forces, while the Saudis supported the royalist forces to shield its own monarchy. Eventually, the Saudi government-a medieval, Islamic fundamentalist, dynastic monarchy with absolute power-survived the nationalistic upheavals.
Saudi Arabia, the largest oil producer with the largest known oil reserves, is the leader of OPEC. It is the only member of the OPEC cartel that does not have an allotted production quota. It is the "swing producer," i.e., it can increase or decrease oil production to bring oil draught or glut in the world market. This enables it more or less to determine prices.
Oil can be bought from OPEC only if you have dollars. Non-oil producing countries, such as most underdeveloped countries and Japan, first have to sell their goods to earn dollars with which they can purchase oil. If they cannot earn enough dollars, then they have to borrow dollars from the WB/IMF, which have to be paid back, with interest, in dollars. This creates a great demand for dollars outside the U.S. In contrast, the U.S. only has to print dollar bills in exchange for goods. Even for its own oil imports, the U.S. can print dollar bills without exporting or selling its goods. For instance, in 2003 the current U.S. account deficit and external debt has been running at more than $500 billion. Put in simple terms, the U.S. will receive $500 billion more in goods and services from other countries than it will provide them. The imported goods are paid by printing dollar bills, i.e., "fiat" dollars.
Fiat money or currency (usually paper money) is a type of currency whose only value is that a government made a "fiat" (decree) that the money is a legal method of exchange. Unlike commodity money, or representative money, it is not based in any other commodity such as gold or silver and is not covered by a special reserve. Fiat money is a promise to pay by the usurer and does not necessarily have any intrinsic value. Its value lies in the issuer's financial means and creditworthiness.
Such fiat dollars are invested or deposited in U.S. banks or the U.S. Treasury by most non-oil producing, underdeveloped countries to protect their currencies and generate oil credit. Today foreigners hold 48 percent of the U.S. Treasury bond market and own 24 percent of the U.S. corporate bond market and 20 percent of all U.S. corporations. In total, foreigners hold $8 trillion of U.S. assets. Nevertheless, the foreign deposited dollars strengthen the U.S. dollar and give the United States enormous power to manipulate the world economy, set rules, and prevail in the international market.
Thus, the U. S. effectively controls the world oil-market as the dollar has become the "fiat" international trading currency. Today U.S. currency accounts for approximately two-thirds of all official exchange reserves. More than four-fifths of all foreign exchange transactions and half of all the world exports are denominated in dollars and U.S. currency accounts for about two-thirds of all official exchange reserves. The fact that billions of dollars worth of oil is priced in dollars ensures the world domination of the dollar. It allows the U.S. to act as the world's central bank, printing currency acceptable everywhere. The dollar has become an oil-backed, not gold-backed, currency.
If OPEC oil could be sold in other currencies, e.g. the euro, then U.S. economic dominance-dollar imperialism or hegemony-would be seriously challenged. More and more oil importing countries would acquire the euro as their "reserve," its value would increase, and a larger amount of trade would be transacted and denominated in euros. In such circumstances, the value of the dollar would most likely go down, some speculate between 20-40 percent.
In November 2000, Iraq began selling its oil in euros. Iraq's oil for food account at the UN was also in euros and Iraq later converted its $10 billion reserve fund at the UN to euros. Several other oil producing countries have also agreed to sell oil in euros-Iran, Libya, Venezuela, Russia, Indonesia, and Malaysia (soon to join this group). In July 2003, China announced that it would switch part of its dollar reserves into the world's emerging "reserve currency" (the euro).
On January 1, 1999, when 11 European countries formed a monetary union around this currency, Britain and Norway, the major oil producers, were absent. As the U.S. economy began to slow down during mid-2000, Western stock markets began to yield lower dividends. Investors from Gulf Cooperation Council nations lost over $800 million in the stock plunge. As investors sold U.S. assets and reinvested in Europe, which seemed to be better shielded from a recession, the euro began to gain ground against the dollar .
After September 11, 2001, Islamic financiers began to repatriate their dollar investments-amounting to billions of dollars-to Arab banks, as they were worried about the possible seizure of their assets under the USA PATRIOT Act. Also, they feared their accounts might be frozen on the suspicion that such accounts fund Islamic terrorists. Iranian sources stated that their banking colleagues felt particularly hassled as Washington heated up its war of words and threats of military intervention. This encouraged Tehran to abandon the dollar payment for oil sales and switch to the euro. Iran also moved the majority of its reserve fund to the euro. (Iran is the latest target of the U.S., which has interfered by stirring up opposition forces, and making covert threats.)
OPEC member countries and the euro-zone have strong trade links, with more than 45 percent of total merchandize imports of OPEC member countries coming from the countries of the euro-zone, while OPEC members are the main suppliers of oil and crude oil products to Europe. The EU has a bigger share of global trade than the U.S. and, while the U.S. has a huge current account deficit, the EU has a more balanced external accounts position. The EU plans to enlarge in May 2004 with ten new members. It will have a population of 450 million; it will have an oil consuming-purchasing population 33 percent larger than the U.S., and over half of OPEC crude oil will be sold to the EU as of mid-2004. In order to reduce currency risks, Europeans will pressure OPEC to trade oil in euros. Countries such as Algeria, Iran, Iraq, and Russia-which export oil and natural gas to European countries and in turn import goods and services from them-will have an interest in reducing their currency risk and hence, pricing oil and gas in euros. Thus momentum is building toward at least the dual use of euro and dollar pricing.
The unprovoked "shock and awe" attack on Iraq was to serve several economic purposes: (1) Safeguard the U.S. economy by re-denominating Iraqi oil in U.S. dollars, instead of the euro, to try to lock the world back into dollar oil trading so the U.S. would remain the dominant world power-militarily and economically. (2) Send a clear message to other oil producers as to what will happen to them if they abandon the dollar matrix. (3) Place the second largest oil reserve under direct U.S. control. (4) Create a subject state where the U.S. can maintain a huge force to dominate the Middle East and its oil. (5) Create a severe setback to the European Union and its euro, the only trading block and currency strong enough to attack U.S. dominance of the world through trade. (6) Free its forces (ultimately) so that it can begin operations against those countries that are trying to disengage themselves from U.S. dollar imperialism-such as Venezuela, where the U.S. has supported the attempted overthrow of a democratic government by a junta more friendly to U. S. business/oil interests.
The U.S. also wants to create a new oil cartel in the Middle East and Africa to replace OPEC. To this end the U.S. has been pressuring Nigeria to withdraw from OPEC and its strict production quotas by dangling the prospects of generous U.S. aid. Instead the U.S. seeks to promote a "U.S.-Nigeria Alignment," which would place Nigeria as the primary oil exporter to the U.S. Another move by the U.S. is to promote oil production in other African countries-Algeria, Libya, Egypt, and Angola, from where the U.S. imports a significant amount of oil-so that the oil control of OPEC is loosened, if not broken. Furthermore, the U.S. is pressuring non-OPEC producers to flood the oil market and retain denomination in dollars in an effort to weaken OPEC's market control and challenge the leadership of any country switching oil denomination from the dollar to the euro.
To break up OPEC and control the world's oil supply, it is also helpful to control Middle East and central Asiatic oil producing countries through which oil pipelines traverse. The first attack and occupation was of Afghanistan, October 2001, in itself a gas producing country, but primarily a country through which Central Asia and the Caspian Sea oil and gas will be shipped (piped) to energy-starved Pakistan and India. Afghanistan also provided an alternative to previously existing Russian pipelines. Simultaneously, the U.S. acquired military bases-19 of them-in the Central Asian countries of Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan in the Caspian Basin, all of which are potential oil producers. After the invasion and occupation of Afghanistan and Iraq, the U.S. controlled the natural resources of these two countries and, once again, Iraq's oil began to be traded in U.S. dollars. The UN's oil for food production program was scrapped and the U.S. Iaunched its Iraqi Assistance Fund in U.S. dollars. In December 2003, the U.S. (Pentagon) announced that it had barred French, German, and Russian oil and other companies from bidding on Iraq's reconstruction.
How would a shift to the euro affect underdeveloped countries, most of which are either non-oil producing or do not produce enough for their home consumption and development? These countries have to import oil. One of the advantages that may accrue to them is that they are likely to earn more euros than dollars since much of their trade is with the European countries. On the other hand, a shift to euro will pose a similar dilemma for them as dollars. They will have to pay for oil in euros, have enough euros deposited-invested in EU treasuries, and borrow euros if they do not have enough for their oil purchases. If, as is projected, the dollar and euro are in a price band (that is, prices will stay within an agreed upon range), they may not have much of a bargaining position.
Oil for euros would be far more helpful if oil-importing underdeveloped countries could develop some form of barter arrangement for their goods to obtain oil from OPEC. Venezuela (Chavez) has presented a successful working model of this. Following Venezuela's lead, several underdeveloped countries began bartering their undervalued commodities directly with each other in computerized swaps and counter trade deals, and commodities are now traded among these countries in exchange for Venezuela's oil. President Chavez has linked 13 such barter deals on its oil; e.g., with Cuba in exchange for Cuban doctors and paramedics who are setting up clinics in shanty towns and rural areas. Such arrangements help underdeveloped countries save their hard currencies, lessening indebtedness to international bankers, the World Bank, and IMF, so that money thus saved can be used for internal development.

Sohan Sharma is a professor emeritus at California State University in Sacramento. Sue Tracy is a hazardous waste material scientist in Sacramento. Surinder Kumar is professor of economics In Rohtak, Inala.

Excellent Thanks! I will start off with 20000 real dollars. I guess I am used to mini accounts with 200:1 leverage whereby :
5000 real dollars / 200 leverage = 1 000 000

Since we only have 50:1 I would need 5000 * 4 = 20 grand.

PS : Apparently you do not need to close your open trades :

Before the start of a contest I had an open position. This position will close during the contest time. Will this trade affect my ranking?

Yes, the P/L accumulated on this trade between the start of the contest and the time that stats are recorded will contribute to the CPL value used to compute your portfolio return. Note, the change in P/L is not measured from the opening of the trade but rather from the start of the contest.

Stuff to watch for in the weeks to come.

http://www.forexfactory.com/showthread.php?t=31721

EUR/USD was little changed during Asia trade. Some analysts suggest that technical adjustment is the main factor driving the USD while increasing expectations of an ECB rate hike is supporting the EUR. Today's comments from the ECB were certainly hawkish and are supporting the view that the ECB will not be done in June. The futures market has fully priced in the expectation that the Fed will keep rates on hold at its June and August meetings. The implied probability that the Fed will cut rates once by the end of the year fell as low as 44% from 50% earlier on Tuesday and 58% on Friday. The CAD added on to gains against the USD after the hawkish commentary from the Bank of Canada (USD/CAD -0.05%). The AUD/USD remains below 0.8200 after disappointing retail sales figures, and nervousness over the situation in China (any sell-off in China could trigger a bout of carry trade unwinding and declines in commodity prices).

Cool ... what are the criteria for winning this thing and earning bragging rights?

The EURO VS DOLLAR CURRENCY WAR MONITOR
Alex Wallenwein
THE YUAN, THE EURO, TAXES, AND GOLD

[Even though this article is 4 years old it is still relevant.As you can see from the scenarios he suggests, China is the one playing the USA and Europe]

http://www.gold-eagle.com/editorials_03/wallenwein072603.html

Question: what do the euro, the yuan, taxes, and gold have in common?

Answer: they all determine the future economic viability of the United States.

There are people in the market today who suggest that investors buy some hush-hush secret yuan-denominated assets to cash in on when the yuan is allowed to float, which will make it rise against he dollar - or so they predict. They say the yuan is "the strongest currency in the world today."

That may be so - or maybe not - but one thing is for sure: China will not allow its currency to suddenly soar 50% or more against the dollar. It will not happen, must not happen, at least as far as Chinese leaders are concerned.

Why?

It is true that China's currency is currently artificially and severely undervalued because of its low peg to the dollar (at probably 40% or more below its natural value), and that if the yuan were allowed to float, it would rapidly climb versus the dollar, and a bunch of money could be made in the process.

But remember that the Chinese economy is totally and utterly export-dependent. China's internal market is virtually nonexistent. The Chinese, as a general population (with the rich "communo-entrepreneurs" in the free economic zones excepted) are still poor. Many of the products produced in China are produced by Chinese laborers for foreign companies (especially US companies) and have no market in China.

If the dollar were to lose 40% or more of its value against the yuan, China's export-dependent economy would be finished in one fell swoop. No American would continue to buy Chinese products if they suddenly cost 40% or 50% more. The American companies that remain profitable by lowering their labor costs through the utilization of Chinese labor would have to fold up their Chinese operations and lose their investments over there. The Chinese boomtowns along the coast would go into rot and decay. The Chinese military no longer would have the wherewithal to pay for Russian submarines for its planned take-over of Taiwan.

The Europeans, on the other hand, do have an internal market - and a huge one at that. Sure, they are hurting just like the next guy when their exports get too expensive as the euro rises, but they can survive what for them will be a temporary downturn, however severe. The Chinese cannot.

The communist Chinese's goal is to annihilate the US. Of course, they would much rather do it through economic warfare than through military conquest.

How can they eliminate the US? By helping contribute to the downfall of the US dollar without killing their exports (some pain is acceptable, but not economic 'death'). How can they do that?

For the Chinese economy to survive in case of a loss of the American market, whatever export market China loses when Americans stop buying Chinese goods must be replaced somehow. The American market must be replaced with the European market. That means, the yuan will have to fall against the euro so China can unload its artificially cheap products on the Europeans instead.

How can they achieve this?

They can sell the 316 billion reserve dollars they racked up by running their trade surplus with the US - for euros.

When the Chinese sell dollars and buy euros, the euro will rise against the dollar. Because the Yuan is for the time being still pegged to the dollar, this will increase Chinese export competitiveness compared to Europe, which will allow them to shift their exports to the 'market of the future.' US bought and paid-for productive assets in China can then be nationalized (it's an emergency, you know) and thus acquired for nothing, and can then be used to produce goods to sell to the Europeans.

The Chinese can then repeat that neat little trick they did with the US and peg their currency to the euro instead, keeping its value competitively low against the euro, racking up future trade surpluses against the Europeans as well. They still have five years left under WTO rules until they must let the yuan float against other currencies.

Isn't that just too cool?

Meanwhile the US economy will begin to collapse of its own dead weight. The tapped out US consumer (the only thing that still holds up any semblance of economic health in the US) will quit spending as the re-fi boom stalls. As the economy worsens, people will lose jobs and the ability to pay their loans back, causing massive loan defaults and monetary base contraction.

These deflationary pressures will offset to some extent the inflationary effect of the inevitable deluge of US dollars returning home as China and other countries continue selling dollars for euros - but not by enough. All of this will decreease Americans' ability to spend and consume and buy imports.

The other Asian "tigers" will follow the Chinese example and shift their export focus to Europe as their American market falters.

So far, so good (or bad, rather). But will Europe be able to consume enough to make up for China's potential loss of the American market?

Well, that's not really the question. Why? Because it doesn't really matter whether they will consume "enough" or not. And why is that? Because, as the housing re-fi boom wanes and reverses, and Americans can no longer generate that additional spending cash, the "American consumer" will not be able to consume enough when "he" loses his jobs and income as the economy spirals lower without his spending-support. That means the US, the Asians' main current export market, will shrink and disappear - anyway.

That is the crux of the matter. "No money, no spendy." The only way to avoid that is to guarantee that the bond market will continue to grow forever - or at least for the next few years. Only then can the re-fi boom be continued. As Greenspan during his recent epiphany revealed, the Fed stands ready to buy US long-term treasuries to pump more money into the failing system, should deflation appear.

What does that mean? It means the US government will borrow more money from the Fed, for starters, raising its indebtedness (the federal deficit). Second, as other nations see the euro and yuan 'writing on the wall', they may decide to sell into this lucrative, Fed-induced rally in bond prices, forcing the Fed to print even more money to "buy" the debt paper in order to prevent yields and therefore long term rates (mortages) from rising - all to prolong the re-fi boom.

If these two factors ever coincide, the result will be hyper-inflation in the US. What will Greenspan do then? Sell the same treasuries he just got done buying with such fervor? Who will buy them? How will he reduce the money supply? How will he fight inflation? By raising rates and choking off any business investment whatsoever? By raising taxes in a weakened economy?

Europe, on the other hand, however badly its major economies may presently be hurting, will be able to consume far more than the US when the US enters its final downward spiral, and that's because the euro's continued buying power is virtually guaranteed, while the dollar's is highly in question.

Had enough of all this doom and gloom for America? Don't believe America will simply lie down and die an economic death?

Well, there is one chance. And that chance is - again- dependent on the American "consumer" in more ways than one.

Remember tax reform? Remember George W.'s tax cuts? Well, they were a drop in the bucket, I know, but the principle is of course correct: leave people and businesses with more cash to spend, and they will spend it. Or save it. Or invest it in infrastructure. And the economy will grow.

But now picture this:

There is currently - and has been for several years - a kind of 'information virus" spreading like wildfire through the internet as you read this. The American socialist/statist/elitist's biggest and dirtiest little secret - is no longer a secret. The proverbial 'cat' is out of the bag, and it is proliferating as if it had bunny-blood in its veins.

What is that dirtiest of all dirty secrets of the US goverment technocrats?

The US income tax.

No, no, it's not unconstitutional. It's also not 'voluntary,' either, nor is it invalid because the 16th amendment wasn't properly ratified, or whatever. But the uncomfortable and hard to believe - but relatively easy to prove - truth is that by law, i.e., by its own terms, the income tax is not imposed on the income of most ordinary Americans.

The truth is that the "income tax" is a perfectly legal, proper, and constitutional excise tax on income generated in international commercial activities. The truth is also that it was written and passed as such, and that it was from its inception not written to apply to the purely domestic income of most Americans.

Finally, the truth is that it was passed off to, and illegally enforced upon, Americans by outright deception - deception that can be traced and documented through ninety years of statutory and regulatory history. The truth is that Americans are not taxed on all of their US income, "no matter where it comes from" as most everyone believes today.

This truth is evidenced in the tax code and IRS regulations themselves - regulations that are as binding on the IRS (and even on all courts below the US supreme court) as they are on you. It was successfully buried for decades under increasing piles of legalese and regulatory gobbledigook, but now has been unearthed, and knowledge of this little truth is spreading - and spreading - and spreading.

The good news is that this truth is not spreading among the usual suspects of the effectively marginalized and de-fanged so-called "patriot" movement. Instead, the truth is spreading among regular folks like you and me, and your neighbors, business owners, a few celebrities, and even among some accountants, "and doctors and lawyers, and such."

The evidence that proves this to be true is far beyond the scope of this article, but it is laid out in meticulous, painstaking, logically undeniable detail at a neat little web site called www.taxableincome.net Taxable Income.

Now, just imagine you didn't have to pay taxes on your domestic US income any longer. I mean zero. None! And imagine no other American whose income is not derived from international trade or certain other foreign-related activities would have to, either. (Indulge me for a moment, here.)

Would that improve your personal balance sheet rather drastically? Sure would, would it not? Would it improve any US domestic business' balance sheet dramatically? You betcha. Would it cause people to save more, invest more, spend more, all at the same time? Probably. Would it eliminate the tremendous drag the entire record-keeping, income tax preparation, and filing requirement has on economic activity? It would. Would it keep the government's hot breath out of Americans' hair when the politicians suddenly have about a trillion or so less dollars to waste and buy votes with every year? You got it.

The point is, the fate of the American economy may ultimately come to depend on the rate of speed at which the news of the discovery of this dirtiest of little government secrets is spread, and its veracity is thoroughly studied, tested, and understood by all (eventually, that is. Come on, give people some credit, will you?)

The point is also that, without the power the US government derives from its ability to tax the incomes of ordinary Americans and American businesses, their power to manipulate the gold markets via the usual suspects of the Fed, the ESF, the gold banking cabal, and the commodities markets, will be severely limited to the point of non-existence.

Without the government's ability to "manage" the price of gold, the advantage of tying the dollar's success as a currency to a low gold price disappears, and so does the incentive to keep that silly, semi-official gold "price" under 31 USC Section 5117 on the books, which means that the US will then be free to value its gold stock at world market prices (as the Europeans now do).

And that means that gold can be freed to soar, supporting the value of the dollar instead of undermining it. Americans can earn, save, invest, and spend more, the euro will no longer be a deadly threat to the dollar, the US government will no longer be a threat to its citizens' liberty (too expensive), and the US can be freed to do what it does best: out-compete, out-invent, out-produce, out-trade, out-consume, out-save, and out-grow every other economy on this planet.

Utopian? Farfetched? Maybe. But truth has a way of eventually working its way through all the deceit, all the lies, all of the market-rigging, all of the legalese-writing, fact-distorting, mind-numbing, news-spinning, currency-inflating, and gold price-rigging that our rich and powerful are so overly happy to engage in.

Naturally, widespread discovery of this little truth will not be the magic pill that cures the US economic ill. Hard times are ahead, in any case. Might just as well have something positive to look forward to at the end of that long, dark tunnel. (And, by the way, that 'positive' is much easier to find if you have some gold with your name on it stashed away somewhere.)

But first, let's watch this current artificial stock-bubbling, and this economic-recovery-flat-lining mess unfold for a few more months. The current powers that be, and the mind-numbed masses, would have it so.

July 26, 2003

* What do you do when all your investments are doing great, when you have a high-paying job or successful business, but the dollars you earn are dropping and dropping in value?
* The euro continues to beat the tar out of the dollar (and your pocketbook) and there is no end in sight. How will this affect your money, your job/business, your retirement, and your kids' education?
* Can you protect yourself from the fallout? YES!

Find out how. Free Report: currencywar@getresponse.com

Copyright by Alex Wallenwein

Alex Wallenwein
Editor, Publisher
www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
Moneypulation Watch (Free Ezine)

Email this Article to a Friend

Alright you convinced me .. I am in.
How will you declare a winner?


Number of Trades ?
Volume of Trades (USD) ?
Maximum Drawdown ?
Sharpe Ratio ?
Portfolio Return (%) ?

You mentioned that we all start with $15000? at 50:1 leverage? that makes 750 000 ... sounds reasonable.

I have limited time so I will catch you on the next one. Trading my real account.

FOMC Minutes And The $
http://www.forexfactory.com/showthread.php?t=31686

This will be the first of the big reports scheduled this week. Market participants will be reading the minutes very closely for a clearer picture as to how the Fed sees things.

We know from the statement that the inflation bias remains intact. We also know that they described the housing slowdown as "ongoing" and further Fed statements indicated they believe the problem to be contained and that they expect growth to be turning up in the second half of the year. They have continued to state they expect inflation to "moderate".

Observers will want see if members expressed concern regarding their forecasts for either inflation or growth. On the inflation side, the Fed mentions things like resource utilization and wage pressure-and BTW-wages will be a big part of the NFP figures.

On the growth side, they'll be concerned about housing and the sub-prime market as well as the consumer.

With this kind of report-I believe it's best to get a gauge of overall market reaction and what their perceptions are regarding future Fed moves.

It's all about the risks-the risks to the FOMC's inflation and growth projections. If the market percieves the Fed to me more concerned about the risks to their inflation projections-that will eliminate a rate cut and be supportive for the dollar. If the market believes the Fed to be more concerned about the risks to their growth projections, market participants will start betting on a rate cut and that will weaken the dollar.

Any hint of a rate cut will boost equity markets and carry trades with them. Bond yeilds will fall and prices will rise, especially on the shorter end of the curve. In a winding situation, JPY crosses appreciate as the dollar depreciates vs GBP,EUR etc.

Certainly, if the market percieves an increase is more likely equity markets will react negatively; carry trades will be sold, bond yeilds will rise and prices will fall. When carry trades are unwinding, the JPY crosses will depreciate as the dollar appreciates vs GBP,EUR etc.

__________________________________________________ _________________________

Growth:

In its forecast prepared for this meeting, the staff marked down the projected increase in real GDP in the first quarter...

...meeting participants agreed that, while recent economic data had been mixed, the economy was likely to expand at a moderate pace in coming quarters.

Thus economic growth likely would increase in coming quarters to a pace close to or modestly below the economy’s trend growth rate. However, additional evidence of sluggish business investment and recent developments in the subprime mortgage market suggested that the downside risks relative to the expectation of moderate growth had increased in the weeks since the January FOMC meeting.

The minutes are reflecting that staff economists revised down their growth projections for the first quarter, but that the FOMC members still expected a moderate pace of expansion going forward although they noted that the downside risks had increased since the January meeting. While it's virtually certain that FOMC members will still expect a moderate pace of expansion, it will be interesting to see if the risks have changed and if growth is still expected to be at the pace outlined above.

Inflation:

At the same time, the prevailing level of inflation remained uncomfortably high, and the latest information cast some doubt on whether core inflation was on the expected downward path. Most participants continued to expect that core inflation would slow gradually, but the recent readings on inflation and productivity growth, along with higher energy prices, had increased the odds that inflation would fail to moderate as expected; that risk remained the Committee’s predominant concern.

What will be interesting to see, is if FOMC members still see the level of inflation as "uncomfortably high", if most still expect the gradual slowing of inflation and if the "odds" have continued to increase or not. It's virtually certain that they will still see the risks of inflation as their "predominant concern".
Last edited by NewstraderFX : Today at 8:55pm.

To add fuel to the fire ...
This is an old article and I want to find out how true this statement is :

According to Percival, back in late 1998, the big hedge funds had a combined bet against the yen in the neighborhood of $70 billion - a massive figure, to be sure. But that massive bet is downright tiny in comparison to today's Giga-Bubble.

John Percival says the speculation in the dollar Giga-Bubble is now in excess of $1.2 trillion. Yes, right now, the speculative bet against the dollar is in excess of a trillion dollars!

The thing is, all the speculative bets will be taken off someday… The money will move on to another trade. In order to take those bets off, one thing certainly has to happen: Those speculators must buy $1.2 trillion worth of dollars.


Dollar vs Euro: More Collapse or a Rise on the Way?

The Investment U e-Letter: Issue # 428
Thursday, April 14, 2005

Dollar vs Euro: More Collapse or a Rise on the Way?
(The Dollar Giga-Bubble)
By Dr. Steve Sjuggerud, Advisory Panelist, Investment U

I want to share the best ideas I can with you. The very best idea I can share with you right now is what I told subscribers to my newsletter earlier this week: Contrary to virtually everything you read, the collapse in the dollar versus the euro appears to be over. And a rise in the dollar, which could be very profitable, is likely underway.

The euro started the year at around 1.35. This morning, it's around 1.29. So contrary to everything you hear, the dollar has actually strengthened versus the euro in 2005, not crashed.

What's going on? It could be the liquidation of the Dollar Giga-Bubble, as currency commentator John Percival called it this week. Percival thinks that there is now an unprecedented speculative bet on against the dollar right now… to the tune of $1.2 trillion dollars. And the way that bet is liquidated is by buying dollars, pushing the value of the dollar higher.

I explained it in this letter to my subscribers earlier this week. I thought I'd share a slightly edited version with you today (as I can't give away the specific investment advice here for free that they're paying for).

A brief "heads-up" here, as I want to be sensitive to your time: This essay is a little longer than a usual Investment U e-Letter, and the simple conclusion up front here is: Don't buy euros now.

The Dollar: Why a Recovery and Rise Is More Likely Than a Collapse

We once had a massive currency-trading "bubble" in the yen… The Japanese yen lost about half its value from mid-1995 to mid-1998. And there was a sure-thing bet built in there… as the hedge fund superstars saw it…

The financial "engineering" is a little complicated. But it was wildly profitable….

You see, deposits in Japan paid no interest, and the Japanese yen was falling. So the big hedge funds borrowed money in yen, paying next to nothing in interest, and invested it in U.S. assets, paying 5%-plus in the late 1990s. They earned the interest in the U.S., and the gain in the U.S. dollar versus the yen. And they did it with enormous leverage, ultimately bringing home returns in the neighborhood of 60% in a year.

It was free money in the late 1990s… And then, it wasn't. For some reason, then yen just started strengthening… To the surprise of the big hedge funds, which had so far made a killing, the trade went against them.

Oh, no… this just threw everything off… The hedge fund big boys were heavily leveraged (even more so than the real estate hotshots on my island in Florida now!), and the rise in the yen was going to kill them. The money they borrowed in yen was going to cost them more dollars to pay back than they ever expected.

Even worse, defying the skeptics, the yen just kept rising. It was up nearly 30% from its 1998 lows by the end of 2000. As the yen rose, the hedge funds actually became their own worst enemies… In order to cut their losses, they had to close out their loans in yen. And to pay off those yen loans, they needed to BUY YEN.

Uh-oh.

The crushing losses became a vicious circle. Their own actions of closing out their positions were killing them.

"The Yen Bubble Pales In Comparison to Today's Dollar Bubble"

Currency Bulletin writer John Percival is now calling today's dollar bubble the "Giga-Bubble."

According to Percival, back in late 1998, the big hedge funds had a combined bet against the yen in the neighborhood of $70 billion - a massive figure, to be sure. But that massive bet is downright tiny in comparison to today's Giga-Bubble.

John Percival says the speculation in the dollar Giga-Bubble is now in excess of $1.2 trillion. Yes, right now, the speculative bet against the dollar is in excess of a trillion dollars!

The thing is, all the speculative bets will be taken off someday… The money will move on to another trade. In order to take those bets off, one thing certainly has to happen: Those speculators must buy $1.2 trillion worth of dollars.
Sign up for the free Investment U e-letter

This week, I'll be traveling to Switzerland. We'll be staying in the world's most expensive city, Zurich. Somehow, wages in Zurich are the highest in the world, by far… Wages in Zurich are some 60% higher than in Miami, for example (based on the UBS study, "Prices and Earnings Around the Globe").

We'll be at the Baur au Lac Hotel, at a steep 640 Swiss francs a night. In 2001, 640 Swiss francs would have meant $350 dollars a night. Not cheap, but we are talking a nice hotel near our meetings in the world's most expensive city. For comparison, a night at the Marriott in Midtown New York will run you $300 these days.

But it's not 2001. In U.S. dollars the Baur au Lac is no longer $350. Since the euro has soared (and along with it, the Swiss franc), that room at the Baur au Lac now costs us over $500 a night!

Everyone is talking about a coming dollar collapse. My take is… the dollar has already crashed. I can't wait to see what I get for $500-plus a night in Switzerland… And I'll definitely let you know.

The Dollar Collapse Is a Sure Thing: The Crash Has Already Happened

Just like we saw with the Japanese yen in 1998, when everyone thought the trade was a "sure thing," it did exactly the opposite.

Right now, everyone thinks the dollar crashing is a sure thing. Meanwhile, the dollar is super cheap (Europe is super expensive), and you earn more interest on your money in the U.S. than you do in Europe.

The euro hasn't completely started its breakdown yet. But my gut tells me that the highs in the euro we saw at the end of 2004, at around 1.36, may be the highs for a while.

And if John Percival is right, and there is $1.2 trillion in speculative money right now betting against the dollar, the smart play is to buy the dollar before that $1.2 trillion comes in. The dollar could soar versus the euro, just like the yen in 1998, when it's all said and done.

The euro hasn't fully broken down yet. When/if it does, some real bleeding could begin. But we're mostly watching for now, playing it safe, as I like to do.

Sizing it up on my investment criteria, we're almost there.

* The dollar is hated.
* The dollar is cheap relative to the euro (plus it pays a high rate of interest in relation to the euro).
* So the one thing we're missing is the true beginning of an uptrend. We're close…

At the very least, don't buy euros now.

Good investing,

Steve

GDP and growth: EU versus USA
http://www.timbro.com/euvsusa/

[This is a 2004 study but it has very pertinent information. Be aware that Europe is on the verge of surpassing USA in terms of GDP growth ... for the time being ... you wanna bet that Warren Buffet is buying US Dollars?]

If the European Union were a state in the USA it would belong to the poorest group of states. France, Italy, Great Britain and Germany have lower GDP per capita than all but four of the states in the United States. In fact, GDP per capita is lower in the vast majority of the EU-countries (EU 15) than in most of the individual American states. This puts Europeans at a level of prosperity on par with states such as Arkansas, Mississippi and West Virginia. Only the miniscule country of Luxembourg has higher per capita GDP than the average state in the USA. The results of the new study represent a grave critique of European economic policy.

Stark differences become apparent when comparing official economic statistics. Europe lags behind the USA when comparing GDP per capita and GDP growth rates. The current economic debate among EU leaders lacks an understanding of the gravity of the situation in many European countries. Structural reforms of the European economy as well as far reaching welfare reforms are well overdue. The Lisbon process lacks true impetus, nor is it sufficient to improve the economic prospects of the EU.

EU versus USA is written by Dr Fredrik Bergström, President of the Swedish Research Institute of Trade, and Mr Robert Gidehag, until recently Chief Economist of the same institute and now President of the Swedish Taxpayer's Association.

Euro vs. $ myths

By Richard W. Rahn

http://www.washingtontimes.com/commentary/20041206-085213-6624r.htm

The dollar has fallen about 35 percent against the euro over the last three years. What in practical terms does the fall mean, how important is it, and what should be done?
Three years ago, the typical American worker had to work about 15 minutes to earn enough after taxes to buy a "Big Mac Meal" in either the U.S. or Italy, while the typical Italian worker had to work approximately 25 minutes to buy the identical "Big Mac Meal" in either country. Today, the American worker still has to work about 15 minutes to buy that same "Big Mac Meal" in the U.S., but if he travels to Italy, it will cost him about 25 minutes of U.S. work time to buy the same meal. Likewise, an Italian worker will still have to work 25 minutes to buy the "Big Mac Meal" in Italy, but if he travels to the U.S., it may only cost him 15 Italian work minutes. (Note, Italy uses the euro as its currency.)
If you say the above makes no sense, you are correct. Nothing has happened in the relative economic performance of the Italian and American economies in the last three years to justify such a swing in purchasing power. Relative productivity and domestic prices are still roughly the same in the two countries, so why the big change in exchange rates? Before answering, I shall first explain what has not caused the rate change.
You may have read the U.S. budget deficit has caused the big shift in exchange rates. However, the U.S. budget deficit is rapidly falling and is likely to be lower (as a percent of GDP) than that of Italy, France or Germany in the next year or so. The U.S. economy is growing more rapidly than the major European economies, and the fiscal outlook for the costly European welfare states with their stagnant or declining populations is far bleaker than that for the U.S. Over the long run, the dollar seems a much safer bet than the euro.
Others argue the U.S. trade deficit is causing the dollar's fall. Actually, that argument is backward. It is the foreign demand for U.S. dollars that largely causes the trade deficit. Foreign governments want dollars to back their own currencies. At the same time, foreign companies and individuals want dollars to invest in the United States because U.S. rates of return have generally been higher than many other places in the world, such as Japan and Europe, over the last couple of decades, and the United States is viewed as a "safe haven."
Foreigners obtain dollars by selling goods and services in the U.S., which requires them to offer a better price and quality combination than U.S. suppliers. This causes our trade deficit.
The central banks of many countries, most notably Japan and China, hold huge quantities (approximately $1 trillion) of U.S. government securities as their own reserves. In recent months, many governments have slowed their purchases of U.S. government securities and bought more euros as a way of building a more balanced portfolio. However, Japan, China and the others are in a trap because, if they slow too much or even become net sellers of U.S. dollars (in the form of U.S. government securities), this will decrease the value of their enormous portfolio of U.S. securities.
The huge swings in currency values increase risk and hence reduce investment and, in turn, hurt global economic growth. Firms active in more than one country can see sharp changes both in costs and profits, much of it beyond their control.
The problem is that central banks, like the U.S. Fed, are charged with maintaining price stability (in their own countries). But without a common point of reference, which the gold standard once provided, it is hard to determine "price stability." Computers and high-tech equipment tend to fall in (relative) price because of technological and productivity gains. Oil prices can fluctuate rapidly because of unexpected supply-and-demand changes. The price of a house is less relevant to buyers than the mortgage cost, a function of interest rates.
A currency is supposed to provide a benchmark to determine the relative value of goods and services. So long as the major central banks use different and elastic benchmarks, the world will suffer from exchange rate instability. Neither Alan Greenspan, nor the leaders of the European Central Bank or the Bank of Japan (and even yours truly) know how to properly define money or determine how much should be supplied.
What is to be done? The great and Nobel Prize-winning economist F.A. Hayek provided the answer for us more than 30 years ago: Governments should give up their monopoly over money. If the market could operate freely, private parties would compete to provide the "best" money. Ultimately, we might end up with a global commodity basket standard, a gold standard or some other measure that best provides the functions of money.
Governments would still need to define the appropriate measure for tax and government payments, but private parties could contract in whatever "money" they wished to for all goods and services, including labor. For private monies to compete effectively, all capital gains' taxes would need be eliminated from currency transactions. Short of this reform, destructive exchange rate swings probably will continue to plague the world.

Richard W. Rahn is a senior fellow of the Discovery Institute and an adjunct scholar of the Cato Institute.

Chinese Stamp TAX

What a difference a year and 5 months makes ....

China lowers stamp tax imposed on securities transaction
http://english.people.com.cn/200501/24/eng20050124_171696.html


Yen Surges and Carry Trades Reverse after China Raises Stamp Tax
http://www.dailyfx.com/story/topheadline/Yen_Surges_and_Carry_Trades_1180462929508.html
Yen Increases After China Boosts Tax on Securities Trading
http://www.bloomberg.com/apps/news?pid=20601101&sid=aqvWHLmdFCnQ&refer=japan

[16:21 EUR/USD: Sarkozy Proposes USD Peg] Boston, May 29. New French President Sarkozy is on a tear these last few days, beating the EUR like a rented mule. He says he wants to do the same as the Chinese, peg the EUR to the USD. He calls the strength of the EUR artificial and that the strength of the EUR has erased all the productivity gains in the French agriculture sector. "I believe in the independence of the ECB and I believe that currency is a tool to serve growth and employment", he is quoted as saying.

Jamie.Coleman@Thomson.com /rd

Saddam tried swithching to Euros and failed. The US got him.

70pc of Iran oil income in non-US dollar


[And we wonder why the US is at Iran`s doorstep. Go EURO!]

http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&subsection=market%20news....

Web posted at: 5/27/2007 1:47:32
Source ::: REUTERS

tehran• Iran, embroiled in a row with Washington over its nuclear programme, has increased the amount of its oil export earnings in currencies other than US dollars to about 70 per cent, an Iranian official said yesterday.

The figure is up from 60 per cent cited in March for Iran’s non-dollar oil export income and reflects the No. 2 Opec producer’s policy of reducing exposure to the greenback.

“About 70 per cent of our oil export income is now in currencies other than the US dollar,” Hojjatollah Ghanimifard, international affairs director of the state-owned National Iranian Oil Company (NIOC), said.

“If the dollar gets weaker, we will increase that percentage,” said Ghanimifard, who in March had cited a figure of 60 per cent for Iran’s oil export income in other currencies.

Iranian officials have said they are seeking to limit dollar-denominated trade. The central bank governor has said Iran was seeking to “distance” itself from dollars and held just 20 per cent of its foreign reserves in the US currency.

“We are following our government’s monetary policy not to depend on the weak US dollar,” Ghanimifard said, speaking on the sidelines of a conference in Tehran organised by Iran’s Ravand Institute for Economic and International Studies.

The United States has been leading efforts to try to isolate Iran over its nuclear programme, which Washington says involves a covert plan to make atomic bombs, a charge Tehran denies.

Washington has slapped sanctions on two Iranian banks, a move that unnerved some international banks working with Iranian businesses and prompted many to halt dollar transactions. UN sanctions have added to worries by targeting an Iranian bank.

“The US administration has tried to deprive NIOC of money. We have found other ways to compensate for the shortfall. Proof of that is that our oil production capacity and production of gas and petrochemical products have increased,” Ghanimifard said.

“A chunk of money came from the Oil Stabilisation Fund (OSF) and some from an additional budgetary hard currency allocation to NIOC,” he said.

Iranian media said this week Iran planned to use foreign exchange reserves to finance a $2bn development of parts of its South Pars gas field after a French bank pulled out.

The OSF, a fund set up to save windfall oil earnings in times of need, forms part of the country’s foreign reserves.

Industry sources say Iran now produces about 4 million barrels per day (bpd) of oil and exports about 2.4 million bpd. In the year to March, Iran earned about $53bn from its oil exports, an oil official said.

I am seeing alot of stuff lately about emotions controlling your genes/cells and quantum mechanics. Is this the lastest fad?

These documentaries is all about that :
http://www.whatthebleep.com/

In calculating inflation, the Bureau of Labor Statistics (BLS) takes a basket of goods and services and tracks their prices throughout the years. This worked just fine when they would track the actual price of the same items year after year. The problem is they no longer use the actual price, and they no longer track the same items year to year. If the price of an item has gone up so much that it might make whichever administration that is in power look bad, they simply drop that item from the basket of goods (deletion), switch to another item (substitution), or make up their own price (hedonic adjustment). Yes, the BLS has become just another division of the governments "Ministry of Propaganda". Its job is to manipulate the numbers, so as to paint smiley faces all over the economy.

http://goldsilver.com/the_dow_is_crashing.php

You never held my hand (never have, never will). But what you need to do is tell me what you are talking about to make your point.

WORLD BANK MEETING Policy board tries to stay focused despite Wolfowitz
Sunday, April 15, 2007 1:04:00 PM

WASHINGTON (Thomson Financial) - World Bank officials are debating strategies here to overcome poverty and spur development, trying to stay focused on policy as speculation mounted on the fate of their embattled leader Paul Wolfowitz.


Wolfowitz, facing mounting pressure to resign, is due to appear at a news conference later, closing out the three day meetings here of top finance chiefs from the bank, the IMF and the Group of Seven industrialized powers.


While the weekend has featured much talk of currency volatility, trade liberalization, institutional reform and hedge-fund regulation, it was the fate of Wolfowitz -- and by extension the World Bank -- that has concentrated minds.


The 63-year-old bank chief is under fire from staffers and advocacy groups clamouring for his resignation after revelations he helped arrange a hefty pay hike for his partner, former World Bank press officer Shaha Riza, when she was transferred to the US State Department in 2005.


His future is now in the hands of the bank's 24-member executive board and Wolfowitz, who has admitted that mistakes were made in the promotion procedure, has pledged to abide by the panel's decision.


But the fear now in World Bank circles is that the turmoil will undermine the institution's core anti-poverty lending and development activities.


'The controversy is distracting the World Bank from its mission,' German Development Minister Heidemarie Wieczorek-Zeul told reporters.


Meanwhile, the UK's International Development Secretary Hilary Benn said 'this whole business has damaged the bank and should not have happened.'


US Treasury Secretary Henry Paulson, addressing the World Bank's policy-setting Development Committee on Sunday, argued that success in the fight against grinding poverty 'will require that we remain focused in our purpose and efficient in our methods.'


One initiative in particular under threat from the Wolfowitz affair is a campaign, actively backed by the bank head himself, to stamp out corruption in countries receiving World Bank loans.


But the programme had drawn sharp criticism even before the allegations of favouritism emerged and the campaign has had to be repeatedly watered down in the face of virulent opposition.


At the September meeting of the bank and IMF in Singapore major European powers such as Britain lined up with developing nations to assail Wolfowitz's strategy as misguided.


In going after graft, the World Bank risked jeopardizing its development work among some of the planet's most needy people, they argued.


While the bank executive board has backed the scheme, criticism has not gone away, as was apparent in remarks from some Development Committee members on Sunday.


'The bank must stick must unswervingly conform to its articles of agreement and mandate, stick to development as the bank's core mission, abide by the principle of non-politicisation (and) respect country ownership and leadership of its members,' insisted Chinese Vice Minister of Finance Li Yong.


Clearer support came from Spanish Finance Minister Pedro Solbes Mira who said that 'strengthening good governance and fighting corruption is necessary to reduce poverty.'


Canadian Finance Minister James Flaherty contended that the bank's credibility could be enhanced if greater attention were paid to the voices of developing countries.


Flaherty in particular cited the procedure under which the president of the bank is chosen, with the post traditionally reserved for a US citizen.


'The discussion in the bank should include consideration of how to improve transparency and accountability in selecting the president,' he said.

============================================================
The World Bank is becoming a joke. They are supposed to help poor underdeveloped countries and all the while they are increasing their salaries.

Dude there are a zillion links ... which one?

I seems like Chavez has paid off his debts to the IMF and gave them the finger. This guys is one of a kind eh? So now the IMF is gonna be poor because it will not get as many interest payments. Wonder if they will really start selling some of their gold (they are the third largest holder in the world).


Venezuela pays off multilateral loans
Saturday, April 14, 2007 5:49:00 PM

CARACAS, Venezuela (AP) - Venezuela said Saturday it has paid off its debts to the International Monetary Fund and the World Bank and is cutting ties to the two institutions, which the government of President Hugo Chavez accuses of perpetuating poverty and economic ills.

'My dear sirs at the World Bank, sirs at the International Monetary Fund -- goodbye to you. Venezuela is free ... and sovereign,' Finance Minister Rodrigo Cabezas told state TV.

By making early payment on loans expiring in 2012, Venezuela saved US$8 million (euro6 million) in interest payments, Cabezas said.

'We are closing a historic cycle of indebtedness,' he added. 'We do not have any debts (with them).'

Officials from the World Bank and International Monetary Fund were not immediately available for comment on Saturday.

Chavez, who was elected in 1998 when Venezuela owed a total of US$3.3 billion (euro2.4 billion) to multilateral institutions, has fiercely criticized previous administrations for indebting the country to the International Monetary Fund and accepting macroeconomic policies blamed for high inflation and other problems that touched off deadly protests in 1989.

Shortly after taking power in 1999, Chavez had the government pay off all debts with the IMF, which closed its Venezuela office in late 2006. On Friday, Chavez announced that the country had made its final payment to the World Bank the day before.

Chavez has proposed founding an alternative 'Bank of the South' to finance infrastructure and development in Latin America.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

What are you doing up at this hour?

01:56 Possible Reaction To G7 On Monday Morning Sydney, April 14: The market was right to bet late last week that the G7 would be a non-event for the currency markets. The question is will G7"s rather sanguine reaction to the current level of exchange rates result in any sharp moves on Monday morning?
It appears that European officials are quite satisfied that the EZ economy is in very good shape and this could explain why there was far more concern expressed by EZ officials back in February than there was at this weekend"s G7. It also appears that the weakening trend of the USD sits well with G7 officials who remain concerned about global imbalances. The fact that the USD/JPY is lower than it was in February was pointed out by Japanese Finance Minister Omi. There was very little mention or concern expressed towards the JPY-funded carry trade, which was being heralded by many analysts back in February as the biggest accident waiting to happen since the dot0cm collapse six years ago. Perhaps the G7 feels that the cleanout of JPY-funded carry trades in early March eliminated some of the less sophisticated investors and/or showed the market that carry trades are not "one-way bets". In any case there doesn"t seem to be anything coming out of the weekend"s G7 to suggest that the G7 is looking to right any wrongs in the FX marketplace.
The fact that the market wasn"t expecting anything form G7 should mute the response to the fact that virtually nothing came out of the meeting. This would suggest that the FX market will keep doing what it has been doing and will not be looking over it"s shoulder to avoid being blind-sided. Based on the most recent trends, the USD should continue to move broadly lower, the EUR should continue to outperform the JPY and high-yielding currencies such as the AUD and NZD should continue to outperform the rest of the field. -- John.Noonan@thomson.com

Look what I found!

World Economic and Financial Surveys
World Economic Outlook
Spillovers and Cycles in the Global Economy
April 2007
http://www.imf.org/external/pubs/ft/weo/2007/01/index.htm#ch2fig

European Officials Say They Are Comfortable With Euro's Gains

By Sheyam Ghieth and Meera Louis

April 14 (Bloomberg) -- European officials said that their economies can withstand the effects of the advancing euro and that a strong currency brings benefits.

``A strong euro is in the interest of Europe,' Dutch Central Bank Governor Nout Wellink said in an interview in Washington today. ``Domestic demand in Europe is strong. We don't have a problem at this moment with the euro.'

The comments may stoke gains in the euro, which yesterday climbed to within 1 percent of a record high against the dollar. The currency has gained as the European Central Bank continues raising interest rates, narrowing a gap with the Federal Reserve, which has left borrowing costs unchanged since August.

The euro-region economy is showing few signs of cooling from the fastest pace since 2000 last year. Exports continue to rise even after a 12 percent appreciation of the euro against the dollar in the past year. The International Monetary Fund last week lifted its forecast for European growth and predicted this year will be the first since 2001 the euro area outpaces the U.S.

``We are optimistic' about European exports and growth prospects, Belgian Finance Minister Didier Reynders told reporters today on the sidelines of the spring International Monetary Fund and World Bank meetings in Washington. ``Europe's capacity to resist external shocks is also due to a strong euro.'

Euro's Benefits

A stronger currency may reduce the cost of imported goods, complementing the ECB's fight against inflation. The ECB has lifted its benchmark rate 1.75 percentage points since December 2005, to 3.75 percent. Gains in the euro may also insulate the region from increases in the price of oil, which is denominated in U.S. dollars.

Compared with the currencies of the euro-region's largest trading partners, the euro has climbed this year to within about 1 percent of its all-time high. The ECB's trade-weighted euro index closed yesterday at 107.24, compared with the record of 108.50 touched on Dec. 30, 2004. The euro was also at $1.3530.

``Until now, it does not' have an impact on exports, German Deputy Finance Minister Thomas Mirow told reporters today, referring to the euro's gains. He said yesterday that the Group of Seven finance ministers and central bank governors didn't address the euro's strength in their meeting in Washington.

Still, French Minister Thierry Breton said that the euro's appreciation must be monitored.

``The euro is strong but stable which is a logical consequence of the situation,' Breton said yesterday. ``In the current environment, vigilance on exchange rates seems needed.'

Breton noted instead that ``a strong dollar is in the interest of the U.S.'

The euro region will grow 2.3 percent in 2007, beating the 2.2 percent predicted for the U.S., the IMF said April 11.

``In the euro zone, we're happy to note that growth in 2006 was at a six-year high,' Luxembourg Finance Minister Jean-Claude Juncker said today in Washington. ``Chances are good that in 2007 and 2008 we'll stay on this path of economic expansion.'

http://www.bloomberg.com/apps/news?pid=20601087&sid=azegr6k9_s04&refer=home

Paulson Says IMF Must Address Currency Manipulation (Update3)

By Kevin Carmichael

April 14 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson stepped up his push for rule changes that would allow the International Monetary Fund to monitor and disclose cases of countries that manipulate their currencies, calling for action ``very soon.'

``Reform of the IMF's foreign-exchange surveillance is the linchpin' of needed changes in the 63-year-old fund, Paulson said today in a statement to the IMF's semiannual gathering in Washington. ``We look forward to action in this important area very soon after these meetings.'

The Bush administration since September 2005 has urged the IMF to leave work such as development lending to others and refocus on ensuring currencies aren't manipulated to fuel exports. Paulson is under pressure from lawmakers to address what many economists say are artificially weak exchange rates in countries including China, after the U.S. trade gap widened to a record last year.

The 185-member fund, under Managing Director Rodrigo de Rato, is studying a rewrite of the exchange-rate framework it laid out in 1977. Paulson said it should focus on ``fundamental exchange-rate misalignment' and the ``dramatic' rise in global capital flows.

`Priority'

At the conclusion of its meeting today, the fund's shareholders directed de Rato give ``priority' to the overhaul initiative, including an update of the 1977 Decision.

As de Rato pursues new guidelines, he should avoid new obligations, keeping ``dialogue and persuasion' as the main approach to surveillance; take into account a country's unique situation, emphasizing ``evenhandedness'; and retain ``flexibility' so the IMF can adjust its monitoring as economic conditions change, the fund said in a summary of their discussions.

Asian nations have been at the forefront of international concern about undervalued exchange rates. Countries including China, South Korea and Taiwan run trade surpluses with the rest of the world and have amassed record currency reserves as they managed their exchange rates.

Record Reserves

China's reserves surpassed $1 trillion as the country's trade surplus swelled to a record $177.5 billion last year. At the same time, the yuan gained just 3.4 percent against the dollar last year, compared with an 11 percent surge in the euro and a 14 percent climb in Britain's pound.

A U.S. Treasury study last month concluded that Asian nations are accumulating reserves in excess of what they need to guard against financial crises. Countries from the region began stockpiling reserves in the past five years after they recovered from the Asian financial crisis in 1997-98.

For Paulson, persuading the IMF to crack down on exchange- rate manipulation may help head off deeper trade tensions with China. The U.S. Congress is considering at least five bills aimed at slowing imports from China and the Commerce Department last month imposed sanctions on Chinese paper products. China's Commerce Ministry said the U.S. actions ``seriously damaged' Chinese interests and refused to rule out retaliation.

The Group of Seven richest countries in a statement yesterday reiterated their call for emerging-market nations -- ``especially China' -- to allow greater flexibility in their currencies.

Seeking Adjustments

The G-7 finance ministers and central bank governors said following a meeting in Washington that ``it is desirable that their effective exchange rates move so that necessary adjustments will occur' in international trade balances.

Some developing nations are skeptical of the U.S.-led initiative at the IMF. The Group of 24 countries, which includes Brazil and India, said in a statement yesterday that finance ministers in the group ``remain doubtful' that a rewrite of the 1977 Decision is ``necessary to pursue the objective of more focused and effective surveillance.'

Paulson's Treasury advocates a deal at the IMF that would raise the influence of developing nations at the same time as increasing the fund's oversight of exchange rates. He said in his statement that the U.S. continues to offer forgoing any gains in IMF voting share in the next round of increasing the finance agency's funds.

Top Priority

Still, Paulson's statement made clear that more vigorous surveillance of exchange-rate policies at the fund was the U.S.'s priority.

``Let us be clear,' Paulson said. ``Exercising firm surveillance over members' exchange-rate policies is the core function of the institution.'

Canadian Finance Minister Jim Flaherty backed Paulson today, telling the fund that its dated exchange-rate guidelines are making it ``increasingly difficult to guide surveillance activities and to hold the fund accountable.'

The deadline for final proposals for the IMF overhauls is October. De Rato was given a mandate for the changes by the fund's members a year ago.

Tim Adams, the outgoing Treasury undersecretary for international affairs, started the U.S. campaign for changes at the fund in a Sept. 23, 2005 speech.

``We understand that tough exchange rate surveillance is politically difficult for the IMF; it is also true that a country has the right to determine its own exchange rate regime,' Adams said at the time. ``Nevertheless, the perception that the IMF is asleep at the wheel on its most fundamental responsibility -exchange rate surveillance - is very unhealthy for the institution and the international monetary system.'

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLNpgnWf.epQ&refer=home


And here is Another CONFLICTING article about the yen
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOyw2uPOXNPs&refer=home

So what is it gonna be? The Yuan? The Yen? You cannot have one without the other I say. The market is gonna be mucho confused in the following weeks. Look for wicked whipsaws.

The beast is gonna be VERY active in BOTH directions I beleive.

G7 meetings
I seems like there is no particular pattern to the meetings.

04/13/2007 Statement of G-7 Finance Ministers and Central Bank Governors http://www.treas.gov/press/releases/hp350.htm

04/13/2007 Paulson Statement Following G-7 Meeting http://www.treas.gov/press/releases/hp349.htm
----
02/10/2007 Statement by G-7 Finance Ministers and Central Bank Governors, Essen, Germany, February 10, 2007 http://www.treas.gov/press/releases/hp256.htm

02/10/2007 Secretary Paulson's G7 Statement http://www.treas.gov/press/releases/hp255.htm
----
09/16/2007 Statement by G-7 Finance Ministers and Central Bank Governors Singapore, September 16th 2006 http://www.treas.gov/press/releases/hp114.htm

09/16/2006 Secretary Paulson's G7 Statement http://www.treas.gov/press/releases/hp99.htm
----
12/03/2005 Statement by G7 Finance Ministers and Central Bank Governors London December 3, 2005 http://www.treas.gov/press/releases/js3062.htm

12/03/2005 Statement by U.S. Treasury Secretary John W. Snow following the Meeting of the G7 Finance Ministers http://www.treas.gov/press/releases/js3034.htm
----
09/23/2005 Statement by Secretary John W. Snow Following the G-7 Meeting Washington DC http://www.treas.gov/press/releases/js2944.htm
----
07/21/2005 Statement by G7 Finance Ministers and Central Bank Governors http://www.treas.gov/press/releases/js2647.htm
----
02/04/2005 Statement of G7 Finance Ministers and Central Bank Governors, London http://www.treas.gov/press/releases/js2246.htm
----
09/20/2003 Statement of the G7 Finance Ministers and Central Bank Governors http://www.treas.gov/press/releases/js750.htm
----
04/12/2003 Statement by Treasury Secretary John Snow after meetings with the G7 Finance Ministers http://www.treas.gov/press/releases/js183.htm
----
02/22/2003 Post-G7 Statement by United States Treasury Secretary John Snow http://www.treas.gov/press/releases/js62.htm
----
09/28/2002 Secretary Paul O’Neill: Post-G7 Statement http://www.treas.gov/press/releases/po3471.htm
----
06/15/2002 "Statement of Secretary O'Neill following G7 Meeting in Halifax" http://www.treas.gov/press/releases/po3176.htm
----
04/20/2002 Secretary O'Neill - Statement Following the Spring Meeting of the G7 Finance Ministers http://www.treas.gov/press/releases/po3017.htm
----
02/22/2001 Statement of G7 Finance Ministers and Central Bank Governors http://www.treas.gov/press/releases/po54.htm
----