Saturday, June 5, 2010
With the dollar being the number one traded and largest reserve currency in the world. The question is asked, "Do you see what is happening to the dollar?" In my opinion it is truly losing its first place position, but not strength due to too much electronic trading that is allowed to go on with little intervention. The major companies on the DOW and S&P are international companies whom are generating profits that are causing the stock market to see growth. European companies are on their way to recovery while the gut of Wall street is like a gaping hole in the middle of the city of Guatemala. When stocks plunged 999pts in 15 minutes and recovered 600pts in the same amount of time, it were these gaping holes that stopped us from true recovery. The source of these gaping holes are speculated to be faulty trading that occurred within a labyrinth of electronic exchanges. A thief doesn't give a dam and those that do don't know exactly how it is occurring. A funny thing happened on the way to the future; The DOW falls at least 10%. A trading halt of an hour to a half an hour will occur. These trading halts create windows of opportunity for investors and investment groups to cancel bad trades or the opportunity to manipulate the market and shake investors confidence with over selling causing panic on Wall street. Now whom does this panic benefit? That just cannot happen to the U.S. stock market but the system failed and it could happen again and even though the U.S. is the best house in the worse neighborhood right now with rising earnings, low interest rates, and investors flocking to the U.S. Dollar as a safe-haven play. But with sluggish overall conditions and near term profitability issues in livestock and dairy sectors, investors in agriculture, which is usually a safe-haven, are being cautious in their purchasing decisions. This Panda bear market shows just how intertwined world markets are and with the DOW still under tremendous pressure due to fears of the debt crisis in Greece, the fundamentals of the game have shifted from a game of baseball or basketball to a globally linked game of soccer(or rugby), an international game loved by Europeans as Americans love Football, Baseball, and Basketball.
With Greece being the epicenter of the financial earthquake the Federal System which dominated global and domestic markets in the late 19th and 20th centuries, created jobs, a centralized banking system known as the Federal Reserve, the Federal Reserve Note, and F.D.I.C. The Federal System has led the way for over 150 years now and only relinquishes its number 1 position to maintain it. The dominoes were set up long before but began to fall in 2008 with the collapse of Lehman Brothers. With all the breakdowns from then up to present day bears witness to a tearing down of the Federal System which is being replaced by the Euro system.
The Euro sign is crossed by two parallel lines, which symbolizes the stability in the Euro system which is controlled by the European Central Bank, the world's most important central bank right now. Unlike the Federal Reserve Bank, it has one primary objective with others subordinate to it. The primary objective of the E.C.B. is tot take care of the foreign reserves of the Euro system and promote smooth operation of money market infrastructures under the Target payment system. In the debt crisis of 2007, the E.C.B., loaned billions in Euros to stabilize bank systems and in conjunction with the Federal Reserve, under the Term Auction Facility, to improve dollar liquidity in 'the zone' and stabilize the money market.
With the number 2 system in the number 1 spot this shows how we have revisited the past as far back as the American Revolution, evidenced by mock tea parties around the U.S.