Forex analysis review
Forex analysis review |
| Conflict of interests within the Fed Posted: 25 Sep 2021 03:08 AM PDT
The key US stock indices (the S&P 500, Dow Jones, and NASDAQ) have been actively growing for most of the past week. The upward movement began after the Fed announced that it would not begin to reduce the QE program in September. The markets immediately rushed to buy shares of key US companies, as they realized that the indices could continue to grow for another month or two or even more, which promises to make a profit. We have repeatedly said that the QE program contributes to the growth of stock indices, as well as all cryptocurrencies. However, in the case of cryptocurrencies, the fundamental background is also of great importance. However, for the foreign exchange market and the stock market, various incentive programs are more important, which in practice are analogous to "helicopter money". The central banks of the world, in order to stimulate economic growth, print hundreds of billions of dollars (or euros, or any other currency) and inject them into the economy. Accordingly, there is more money, and it must be spent somewhere. Therefore, it is not surprising that the shares of many companies rose very much in price during the crisis. There is simply more money in the economy, so the volume of investments has increased. Also, the effect of the QE program is clearly visible in the foreign exchange market. Over the past year and a half, the dollar has been actively falling in price against both the euro and the pound. And in the last 6-9 months, it can not even show a normal correction in size. It is because the Fed's actions spur inflation, which has already risen to a 13-year high in the United States and increases the volume of money supply, which leads to an increase in the supply of the dollar in the foreign exchange market. However, last week, it also became known that not only private investors decided to earn extra money on the growing US stock market, but even the members of the Fed board themselves were engaged in investing, which is formally prohibited, as it creates a conflict of interests. It should be understood that representatives of the monetary committee cannot actively use those investment tools that they themselves can influence. However, it turned out that at least three members of the Fed bought the same securities as the Fed itself as part of its QE program. It is reported that the head of the Federal Reserve Jerome Powell owns municipal bonds in the amount of close to $ 2 million. Boston Fed President Eric Rosengren invested in real estate investment funds that own mortgage-backed securities, while the Fed also actively bought up the latter type of securities. The president of the Federal Reserve Bank of Richmond, Thomas Barkin, has corporate bonds worth about $ 2.5 million and these securities were also bought by the Fed. Thus, now there is an open question with corporate ethics and whether the above-mentioned persons should get rid of their assets, which the Fed also buys in parallel. It is known that Jerome Powell has already ordered a review of the central bank's ethics rules, which relate to securities and their derivatives allowed for investment by officials. The material has been provided by InstaForex Company - www.instaforex.com |
| The National Bank of China has outlawed Bitcoin Posted: 25 Sep 2021 03:08 AM PDT
The bitcoin cryptocurrency has crashed down once again. Back to the support level of $ 40,746, as we expected yesterday. However, this movement was not technical. However, we will talk about the reasons a little below. In the meantime, it should be noted that the downward trend for bitcoin remains, as the downward trend line remains relevant. The price has never managed to gain a foothold above the Ichimoku cloud during the last round of decline. Thus, the bulls cannot develop growth now. But at the same time, they keep the pair above the level of $ 40,746, which is now a certain critical level for cryptocurrency. At the same time, the trend line and the level of $ 40,746 form a kind of narrowing triangle, in which bitcoin is now squeezed. Thus, sooner or later, one of the boundaries of this triangle will be broken and the quotes will move in this direction. Thus, it remains to wait for the breakdown of one or another line. Meanwhile, the National Bank of China continues to wage war with cryptocurrencies. Earlier, the Central Bank of China completely banned mining on its territory and also introduced serious restrictions for all companies that provide certain services related to the cryptocurrency segment. This step provoked an outflow of miners from the Middle Kingdom, and bitcoin has been experiencing serious problems for a long time. However, the story did not end there, as it became known yesterday that the Central Bank of China completely banned all cryptocurrency operations in the country. Now any use of cryptocurrencies will be regarded as illegal activity and will be punished by law. The official statement of the central bank says that this measure is aimed at stabilizing risks for the financial sector, as well as maintaining national security and social stability. Thus, as we can see, any central bank in the world has the opportunity to completely ban bitcoin at any time. Just a year ago, such a scenario was discussed by some experts. However, many of them believed that it was impossible to implement it in practice since bitcoin was already too deeply embedded in the financial system of the whole world. However, as we can see, in practice, the one who has the opportunity to change something is right. Therefore, the future of bitcoin and other cryptocurrencies will depend on the actions of central banks and governments. As long as they allow the whole world to play a game called "cryptocurrencies", which have no intrinsic value, bitcoin can maintain a long-term and positive attitude. But nothing prevents the European Union or the States from banning it. It should be recalled once again that no major central bank benefits from a currency (or its equivalent) that is beyond its control, and transactions for which cannot be tracked. After all, with the help of bitcoin, you can not only conduct various illegal transactions and finance terrorism. However, you can also hide income or evade taxes, which again is not beneficial to any government. Therefore, the trend is emerging to tighten the legal framework for cryptocurrencies in many countries of the world. The trend on the 4-hour timeframe remains downward. Bitcoin fell to the support level of $ 40,746 for the third time and rebounded from it again. However, we recall that the level of $ 43,852 was also overcome on the third attempt, so nothing prevents the "bitcoin" from returning to the level of $ 40,746 again and overcoming it on the fourth attempt. At the same time, fixing the quotes of the "bitcoin" above the trend line will return it to an upward trend. The material has been provided by InstaForex Company - www.instaforex.com |
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