User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday April 15, 2009 - 13:55:32 GMT
Black Swan Capital -

Share This Story:
| | Email

Deflation bite!

Key News
• European Central Bank council member Axel Weber said cutting the bank’s benchmark interest rate below 1 percent risks bringing the interbank money market to a standstill. (Bloomberg)

Key Reports Due (WSJ):
7:00 a.m. Mortgage Application Refinance Index: Previous: +3.2%.
8:30 a.m. Mar Consumer Price Index: Expected: -0.1%. Previous: +0.4%.
8:30 a.m. Mar Consumer Price Index, ex-food energy: Expected: +0.1%. Previous: +0.2%.
8:30 a.m. Apr Empire State Fed Manufacturing Survey: Expected: -35.5. Previous: -38.23.
9:00 a.m. Feb Tsy International Capital: Previous: -$60.9B.
9:15 a.m. Mar Industrial Production: Expected: -0.9%. Previous: -1.5%.
9:15 a.m. Mar Capacity Utilization: Expected: 69.6%. Previous: 70.2%.
10:30 a.m. U.S. Energy Dept Oil Inventories For Apr 10
1:00 p.m. Apr NAHB Housing Index: Previous: 9.
2:00 p.m. Federal Reserve Beige Book

“It's income tax time again, Americans:  time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta.”

Dave Barry
FX Trading – Deflation bite!
The risk appetite trade was progressing nicely until news of US deflation hit the wires.  Maybe now those so-called analysts who believe inflation is solely about money will finally see the light.  Nahhh….

The reason I say that is because I watch the parade of people on stage often at seminars where I speak.  Most simply mouth the line that inflation is a monetary phenomenon and because the government has monetary spigots working 24/7 there MUST be inflation.  “It has to be,” is there lament.  Well, as all things in the economic world it doesn’t have to be.

Back to French economist Frederic Bastiat for help, “That Which is Seen, and That Which is Not Seen,”…

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference - the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, - at the risk of a small present evil.
The armchair inflation analysts see money supply. 

 (Chart unavailable in text format.)

They don’t see credit destruction from trillions in toxic paper and bad loans, for credit doesn’t seem to enter the mindset of the average money supply analyst.  And the armchair analyst doesn’t either see, or give much weight to, a thing called monetary velocity. 

 (Chart unavailable in text format.)

Effectively, monetary velocity measures the simulative effect of money.  Think of it as the multiplier coupled with money supply; together they tend to help us see real spending hitting the real economy i.e. real money chasing real goods.  If money velocity falls, as it does during recession (and as you can see in the chart above), it tends to neutralize the increase in money supply.

This is no normal recession, savings are being built as highlighted in yesterday’s quotable from Stephen Roach:

“Fortunately, the American consumer is smarter than the quick-fix Washington mindset. Shell-shocked families -- especially some 77 million baby boomers for whom retirement planning is an urgent imperative -- know they have no choice other than to save. The personal saving rate has risen from 0.8 percent to 4.2 percent in the past six months alone, and is on its way to a new post-bubble equilibrium that I would place in the 7.5 percent to 10 percent zone.”

Though we are not economists, nor pretend play one when on TV, we think this increased level of savings will tend to suppress the monetary velocity in the US economy for longer than expected and thus dampen inflation for longer than expected. 

Though banks are getting the money…

 (Chart unavailable in text format.)

..but they aren’t lending to real people…many don’t want it, and those that do are being rejected.  Thus, credit, which is effective the demand for money to be spent on real goods, is also pressing down on the hopes and dreams of armchair money supply inflation theorists everywhere. 

Will the weight of all this money one day hit the proverbial fan?

 (Chart unavailable in text format.)

Maybe?  But we think inflation fears are way over played until the US and global economy start to normalize. 

Tomorrow we get a look at China’s GDP.  What we haven’t factored into this discussion about inflation vs. deflation is the idea that in order to maintain some semblance of an export machine, China could effectively push down further the cost of final goods prices, which again plays into the deflation argument.

Central banks are worried.  Otherwise why would they all be heading toward ZIRP (Zero Interest Rate Policy)?  It worked so well for Japan, why not!

Interested in specific trading recommendations and more currency research?  You can find that in our subscription-based newsletter—Currency Strategist.  Click here to find out the details or sample our service for two weeks for free.

Jack Crooks
Black Swan Capital LLC


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 17 July 2018
AA 08:30 GB- Employment
A 13:15 US- Industrial Production
AA 14:00 US-Powell Testimony
Wed 18 July 2018
AA 08:30 GB- CPI
A 12:30 US- Housing Starts/Permits
AA 14:00 US-Powell Testimony
Thu 19 July 2018
AA 1:30 AU- Employment
AA 08:30 GB- Retail Sales
A 14:30 US- EIA Crude
A 12:30 US- Weekly Jobless
Fri 20 Jun 2018
A 12:30 CA- CPI/Retail Sales

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105