Tag Archives: Dollar

Bitcoin and paper money has no real value but our planet does

Bitcoin has skyrocketed so far in 2017, but what is it really worth? Its like other currencies like the US dollars; worthless. Its just like gold; worthless. They are all useful as a means of exchange.

The Nobel Peace Prize 2017 was awarded to International Campaign to Abolish Nuclear Weapons (ICAN) «for its work to draw attention to the catastrophic humanitarian consequences of any use of nuclear weapons and for ground-breaking efforts to achieve a treaty-based prohibition of such weapons».

The Earth`s climate has changed throughout history. Just in the last 650,000 years there have been seven cycles of glacial advance and retreat, with the abrupt end of the last ice age about 7,000 years ago marking the beginning of the modern climate era – and of human civilization.

The planet`s average surface temperature has risen about 2,0 degrees Fahrenheit (1,1 degrees Celsius) since the late 19th century, a change driven largely by increased carbon dioxide and other human-made emissions into the atmosphere.

Since the beginning of the Industrial Revolution, the acidity of surface ocean waters has increased by about 30%. This increase is the result of humans emitting more carbon dioxide into the atmosphere and hence more being absorbed into the oceans.

The amount of carbon dioxide absorbed by the upper layer of the oceans is increasing by about 2 billion tons per year.

Money has no real value. Our planet does.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Filed under Politics, Uncategorized

What`s up with Euro, Dollar and Gold?

Gold is still in a bearish market and the precious metal is declining and hit a 3,5 month low today. At the same time we can see a strong rally in the U.S dollar, hitting a twelve years high. Gold is trading at $1,147,70.

The U.S dollar is soaring and the Euro is plummeting. When the U.S dollar hits a new twelve years high, the Euro hits a twelve-year low. Some analysts are betting that the euro can sink to the same level as the U.S dollar.

Stack of $100 bills

The euro started to fall sharply last summer when the ECB president Mario Draghi laid the groundwork for QE, but the euro has fallen even sharper since the €60 billion-a-month bond-buying programme started on monday this week.

The U.S dollar started the rally at the same time last summer, boosted by strong hints from the Fed that it could start to raise interest rates later this year. EUR/USD is trading at $1,0545 on Wednesday, and that is below $1,06 for the first time since April 2003.

Mario Draghi said cheaper borrowing costs for some eurozone countries suggested that QE – which tends to drive up the value of bonds, and thus depress their yields (which moves in the opposite direction), was already having an effect.

Some analysts have questioned whether the ECB will be able to find sufficient bonds to buy to hit its monthly target. German 10-year bond yields hit a record low of 0,2% on Wednesday. Other Eurozone countries bond yields are also at or near record lows.

The German bond yields at record lows is mainly due to safe-heaven demand from investors, while the other European country bond yields falling is due to the ECB`s plans to buy sovereign bonds as part of its QE of it monetary policy.

A strong dollar is good for the U.S consumers. They can buy cheap things from Europe and Asia, and at the same they have low gas prices. It sounds like party to me. One dollar now buys almost 16 pesos.

The Turkish lira, the Mexican peso, hit an all-time low to the dollar. The Indonesia rupiah hit a 17-year low of 13,1 to the dollar. The Norwegian krone hit a 13-year low and the Brazilian real just hit a 10-year low to the dollar.

The broad Dollar Index (DXY) has now wopped by 23 percent since last summer. That`s the most aggressive rise in more than 34 years! Some of the indicators is more overbought now than at any point in modern history.

DXY 25 yr

(Picture: DXY Index)

As you can see from the chart in RSI, it is overbought. More than we were at the depths of the 2008 credit crisis. That crises caused an immense flight to safety rally in the buck, along with the biggest rally in U.S Treasury prices ever. DXY`s previous close is 99,68.

The dollar rally is now broadly pressuring emerging markets, hurting commodity prices, and undermining the profits of multinational U.S corporations. As the dollar increase, commodities and emerging markets cry.

The problem is that the dollar rally is getting out of control!

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Filed under Commodities, Emerging markets, Quantitative Easing

Inflation and Gold

Investors buy gold because they think that gold is a hedge against inflation. The value of the paper currency falls in terms of the goods and services that it can buy and inflation goes in the opposite direction; up.

Investors love gold when inflation is high and as you may know, gold has a direct relationship with inflation. So when inflation goes up so does the demand for gold. Imminent hyper inflation was expected during the QE program, but that is not the reality right now.

You can track inflation using the Consumer Price Index (CPI). This index measures how the price of a basket of consumer goods and services changes. CPI will give you a picture of the increase in the level of prices.

us cpi

This data is released by the U.S Bureau of Labor statistics on a monthly basis. U.S inflation rate is -0,09%, (released Feb 26, 2015), compared to 0,76% in December and 1,58% last year. This is lower than the long-term average of 3,32%. Down -111,8%.

Inflation fell in January for a third straight month as U.S consumers continued to spend less on gas, food prices flattened and as costs retreated for new vehicles,used cars and trucks, household furnishings and operations, airline fares, alcohol and tobacco. U.S inflation turned negative for the first time since 2009.

The CPI measures what American pays for everything from cloths, airline tickets, fruits and vegetables to cars. Declines were again led by energy as prices at the pump tumbled about 19%. Gasoline prices have plunged 35% over the past 12 months.

A slower pace of inflation means consumers can buy more with their money, but a sustained decline over and extended period (deflation), can wreak havoc on an economy. Falling energy prices are beginning to filter down into other areas.

Core US inflation advanced 1,6% over the last 12 months, and the core 12-month reading is the benchmark inflation figure monitored by the Federal Open Market Committee (FOMC) as it helps in deciding where to set the key interests rate.

«We think inflation is going to move lower before it moves higher. Declining oil prices have had a very major influence,» Fed Chairwoman Janet Yellen said in a testimony.

The current level remains below the Fed`s 2% annual inflation target. In written remarks read to Congress, Janet Yellen stated:

“The Committee expects inflation to decline further in the near term before rising gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate, but we will continue to monitor inflation developments closely.”

Consumer Price Index data for February inflation and the annual period is scheduled for release on March 24, 2015.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Filed under Commodities, Politics, Quantitative Easing

The Currency King

The dollar started the big rally in July last year and are getting stronger and stronger. The dollar Index Spot (DXY) is now trading at 94,7450. Up 0,31% today. It`s been a safe heaven so far while the precious metal is still in the bearish market, struggling to break out from its downtrend. Will the dollar remain strong?

It`s all about the world of global payment were one currency is growing, and it has increased in global payment over the last two years. The change in percent is +266%! That marks the distance between the currency and its leaders. What currency is that?

Stack of $100 bills

According to BIS (Bank for International Settlements), it has moved from No 13 where it accounted for 0,6% of the global payments. Now, it`s up to No 5 with 2,2% of payments of the same currency. What about the leaders? At the end of 2014, 40,2% of global payments were in euros and 33,5% of the payments were in U.S dollars.

A big distance up to the leaders which is 1,827,3% up the Euro and 1,522,7% to the U.S dollar. That`s not gonna happen any time soon, and the government doesn`t want that to happen anyway I think. The currency I`m talking about is yuan of course. Or…..

Many things can happen in this world, You`ll never know. Game-changers can be Ukraine, Russia, Greece or Fed`s interest rate hike to name a few. Historically, we know that currency shares could shift rapidly, as it did between the world wars. What we see happens in Europe now is not good.

If the demand for the yuan goes up it will kill the Chinese economy and their growth will stop. Chinese exports comprised 26,4% of Chinese GDP in 2013, according to World Bank. Five years ago it was 26,72%, so it haven`t changed much. This why it is important for China to control their currency, because a rising demand for yan would affect their export and make them sell less products to the rest of the world. They can`t afford that because selling their products is important for them.

But what about the U.S citizens? When the demand for a currency increase, the value of the currency will go up. Just like the dollar since July last summer. It`s good for the consumers in the country with the rising currency because they can buy foreign goods at a cheaper price.

On the other hand. It`s not good for the businesses in the country with the stronger currency because they will sell less of their goods to other countries, because their goods cost more when they are priced in other currencies.

This is a double-edged sword that makes this issue a political hot potato right now.

All the central banks are talking about this issue right now, and the Chinese government pegs its currency to the U.S dollar. In an effort to stabilize is exchange rate, everyday China sets the official rate at which yuan can be traded for dollars. The yuan is allowed to fluctuate within a 2% band around the official exchange rate.

This combination of a peg and a floating rate is meant to allow market forces to work, and not go overboard. The Chinese allow flexibility, but only on their terms, and that takes us back to the issue of a rising currency.

Export is very important for China, and if they want yuan to rise in global payments, they need to make yuan more available for foreign entities. But a rising demand for Chinese currency on the world market would lead to upward pressure on the exchange rate for yuan, which the Chinese government controls. Many people blamed China for being a currency manipulator a few years ago, but that would World Trade Organization set a stop for.

A rise in yuan will hurt the Chinese export, which account for a quarter of their GDP.

To make it worse. Once sufficient amounts of yuan were available away from China, more of their currency would trade outside of their governments control. Offshore yuan trading already occurs. In this unpegged environment, the yuan is free to move against other currencies based on market conditions without constraints.

More offshore trading will make the Chinese governments to lose control over the exchange rate, and thereby lose the ability to set one of the most important components of its very large export business.

While the Chinese might rail against the U.S dollar from time to time, and might even talk about how the yuan should occupy a more prestigious place among world currencies, it makes little sence for a country that uses a command economy to turn control of its currency over to international forces.

The yuan will not be the worlds currency leader tomorrow or anytime soon.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Sell off on friday

A big drop for U.S tech stocks on friday. Nasdaq was down -2,60% on friday. S&P 500 -1,25% and the Dow -0,96%. Nikkei is also down today, together with the other Asian markets. Nikkei is down -1,69%.

Europe is also down today. Stoxx 50 is down -0,89%. FTSE 100 -0,71%. CAC 40 -0,72% and DAX -1,24%. At the same time, you can see the commodities trading down too. Gold is down -0,16%. Silver is down -0,33%. Crude oil (Brent) -0,95%, and Copper -0,13%.

Nadaq

(Nasdaq: Apris 4, 2014)

Many investors have talked about the valuations in the tech stocks for a while now, and many predicted a tech bubble was on the way. I wrote about it for some weeks ago, and I said Twitter was the most expensive stock in this universe.

52 Week high for Twitter is 74,73, and the stock traded down -2,07% on friday. Twitter is down about 50% from the top very soon. Marketers are embracing Facebook over Twitter, and they will rather go for Youtube and LinkedIn before Twitter.

Sometimes investors need to take some profit and friday was a great day for that. It seems like the U.S markets will open down today. I`m excited about the trading sessions, not only today, but for the rest of this week. Take a look at the dollar. It`s up!

Tech and biotech is so far the most popular sectors in 2014, but both of them slide now. Many tech stocks are trading down in Europe too. This is a great time for daytraders. I will follow the charts this week before I start my vacation on friday. Easter bunny is waiting.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Filed under Commodities, Stock market, Stocks