Monday, October 24, 2011
For our German Friends and Consults - Euro Negotiations - Das Brille
You are a vote or two away from funding the entire world with no help from anyone. Seems fair to you? Not to us.
Of course, your poor folks can simply work harder.
The more wealthy folks can have their wealth dissolved by currency deflation. Meanwhile, So. Europe can be used for vacations.
Oh well, you are nice folks so please carry the rest of Europe on your backs as usual.
Thanks much. We honor your philanthropy to Europe!
Natuurlich, dem blinden hilft keina brille...
Of course, your poor folks can simply work harder.
The more wealthy folks can have their wealth dissolved by currency deflation. Meanwhile, So. Europe can be used for vacations.
Oh well, you are nice folks so please carry the rest of Europe on your backs as usual.
Thanks much. We honor your philanthropy to Europe!
Natuurlich, dem blinden hilft keina brille...
US Equity Volume is Small on the Exchanges
At first approximation, nearly all US$ fund activity has been transformed into Euros as we have long said. Risk but much more earnings. Until...
Of course, these US funds intake US$ and are required to pay in US$, so there needs to be a small US$ fund available to make weekly payments and to hedge anything in the near future not already covered by put purchases. But the US fund money is almost 100% in Euros.
And without a put-purchase, those Euros are held up, just as if you or we were to purchase a bank CD (not recommended!) until a certain date by contract; therefore, the US$ mini-fund is necessary for the money market, pension, hedge, big bank, and all other US$ funds.
It follows that the Euro/US$ ratio, easily controlled by supercomputers (in this case, even ancient-Intel processor-based computers) exactly duplicates any and all US$-based equities (even oil! although that is a special case.)
If the Euro goes up by whatever means, then the world is fat, dumb, and happy. If the Euro goes down, then the funds need to purchase puts; otherwise, they are forced to play the US-equity vs. Euro computer game to keep from losing your money.
US equity volume?
Please check for yourselves. Tiny. Why? Because when the Euro/US$ goes up, then fat-dumb-and-happy means that a fund doesn't need to do anything right then.
If it goes down, then most of the funds have already purchased puts (please check out the volume for yourselves) so they don't even need to trade anymore!
Simple as pie.
The only loser? YOU if you do not understand this ahead of time...
Of course, these US funds intake US$ and are required to pay in US$, so there needs to be a small US$ fund available to make weekly payments and to hedge anything in the near future not already covered by put purchases. But the US fund money is almost 100% in Euros.
And without a put-purchase, those Euros are held up, just as if you or we were to purchase a bank CD (not recommended!) until a certain date by contract; therefore, the US$ mini-fund is necessary for the money market, pension, hedge, big bank, and all other US$ funds.
It follows that the Euro/US$ ratio, easily controlled by supercomputers (in this case, even ancient-Intel processor-based computers) exactly duplicates any and all US$-based equities (even oil! although that is a special case.)
If the Euro goes up by whatever means, then the world is fat, dumb, and happy. If the Euro goes down, then the funds need to purchase puts; otherwise, they are forced to play the US-equity vs. Euro computer game to keep from losing your money.
US equity volume?
Please check for yourselves. Tiny. Why? Because when the Euro/US$ goes up, then fat-dumb-and-happy means that a fund doesn't need to do anything right then.
If it goes down, then most of the funds have already purchased puts (please check out the volume for yourselves) so they don't even need to trade anymore!
Simple as pie.
The only loser? YOU if you do not understand this ahead of time...
Gold as a Currency Replacement when Currencies Deflate
Gold is relatively high as a hedge for worthless currencies, e.g. the Euro will likely be printed at a high rate as part of the failure to get out of the Euro-Zone mess.
Our "guess" is that political pressure in an election year will prohibit Uncle Ben from any further US$ printing press activity while the Euro gets printed like monopoly money. Pay attention Forex friends!
Once the dollar stopped getting printed with nothing to back it up, the dollar has rissen hugely. At that point, gold has lost some of its luster.
The Euro is trash. Enough said. The slightest hint the US will print more $, gold will be well over $2000. One of the Fibonacci retracements is well over 60% and that is our anticipated range for the US$ price of gold in that case.
Our "guess" is that political pressure in an election year will prohibit Uncle Ben from any further US$ printing press activity while the Euro gets printed like monopoly money. Pay attention Forex friends!
Once the dollar stopped getting printed with nothing to back it up, the dollar has rissen hugely. At that point, gold has lost some of its luster.
The Euro is trash. Enough said. The slightest hint the US will print more $, gold will be well over $2000. One of the Fibonacci retracements is well over 60% and that is our anticipated range for the US$ price of gold in that case.
Texas Instruments - A Tutorial in Currency Trading
Yet another... a... ah... a surprise... higher revenue and lower earnings and even lower expected earnings.
Why? Because TI is a US co.
All Q long it sells all over the world for lots of $ while the US dollar is low because of the Fed printing. Just look at the Forex charts. Then, at the end of the Q, when they receive payments (net 30, 45, 90) etc. then the US dollar is suddenly valuable because there was a Fed statement in Sept. that clearly said "there is no more money printing for now."
So revenue (in US $) is high, earnings are low. A co. like TI is big enough to have sales all over the globe, but is also too small to have a "currency exchange" dept. as does a large international co. like IBM that carefully hedges its international business with currency futures.
That's why we are seeing this over and over again.
It's all a currency trade for the not-yet-educated.
US corporations? Without the currency exchange, they are net losing real money. A kid in 6th grade can figure this out on his or her own.
Why? Because TI is a US co.
All Q long it sells all over the world for lots of $ while the US dollar is low because of the Fed printing. Just look at the Forex charts. Then, at the end of the Q, when they receive payments (net 30, 45, 90) etc. then the US dollar is suddenly valuable because there was a Fed statement in Sept. that clearly said "there is no more money printing for now."
So revenue (in US $) is high, earnings are low. A co. like TI is big enough to have sales all over the globe, but is also too small to have a "currency exchange" dept. as does a large international co. like IBM that carefully hedges its international business with currency futures.
That's why we are seeing this over and over again.
It's all a currency trade for the not-yet-educated.
US corporations? Without the currency exchange, they are net losing real money. A kid in 6th grade can figure this out on his or her own.
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