By: Oliver Schoeffel

Forex is the nickname for the Foreign Exchange Market. In the United States, there are several branches of the stock market, each with their own name. For instance, some stocks trade on the Dow Jones, others on NASDAQ. Of course, all stock market transactions in the United States take place on the New York Stock Exchange (NYSE).

In other countries the same is true. There may be one or more distinct markets. However, international trade takes place on the market termed the Foreign Exchange Market, or Forex. Several countries across the world in almost every time zone participate in trade on Forex, with multiple currencies being utilized and stocks and commodities from all participating countries being offered for trade.

Because there are so many nations and time zones involved, Forex does not function as a “business day” entity like most domestic stock markets. It remains open for trade 24 hours a day, 5 days a week. Of course, these additional hours increase the risk factor intensely for those of us who are human and obviously cannot monitor our investments 24 hours a day. This means that the value of your holdings could potentially plummet overnight, while you sleep, because other countries are still trading while you are in a dream world.

By: Oliver Schoeffel

What is inflation, how it impacts the global economy and markets, and what conclusions for investors?

Let’s start by the definition. The standard statement that inflation is a general increase in prices is not correct. Precisely, monetary inflation is an increase in the supply of money. Then, it implies an increase in prices. The increase in prices is a simple consequence of money losing value. But you must not inverse the logic and conclude that an increase in prices will generate inflation. This is not correct! In fact, it is quite obvious to imagine mechanism for price increases with no inflation. Suppose that the money supply remains constant but that the supply of a product X is interrupted or reduced for some reason. Then, prices of X will increase mechanically but no increase in money supply, then no inflation. Deflation, of course, is just the opposite: a decrease in the money supply.

It is not just academic wording with no significance for the world of markets. Inflation is an essential discriminator for Bond prices and Bond prices themselves are directly anti-correlated to Stock prices… Understanding this fundamental variable, that inflation is, will make the complete decision chain on financial markets more transparent and readable.

That said, we still have to determine what money supply means exactly!An interesting word exchange happened a few years ago when US Representative Ron Paul asked Federal Reserve Chairman, Alan Greenspan, what he considered to be the best tool to measure money supply. Greenspan plainly admitted that he was at a loss for picking out what such a measure might be. When US Representative Paul suggested that it must be difficult to manage something you cannot even define, Chairman Greenspan not only agreed with him but also said it was “impossible”.

Hum, interesting! If we don’t know what money supply is, how can we determine whether the money supply is increasing or decreasing? In practice, the monetary authorities can make some basic counts with what they call monetary aggregates, which include various forms of deposits at financial institutions as well as notes and coins in circulation. I do not enter into details, which do not matter so much for the purpose of this post. For example, if interest rates are decreased, it gives more opportunity to write some credits and consequently to increase the money supply… Debt creation is by essence an increase in money supply, and therefore inflationary. However, we should never forget one key point: during the economy slow down, we can see an increase in the amount of defaults and bankruptcies. Therefore, if the lenders do the correct thing, which is to write the bad debt off their books, the money supply will be reduced and that is deflationary. Then, a situation as the one we are living right now, is mixed up by inverse sentiments and forces… My personal balance makes me think that the net result is under control with today levels of economic indicators. An increase of inflation is on the tabs, but it would not be a negative sign in the current stream of US economy… Another technical point which enter into the game but beside the scope of this post: I expect a slight increase in the velocity of money, which will also contain any inflation pressure to sustainable levels…

A temporary word of conclusion: there is no worries on fundamentals (concerning monetary management) for decreasing further FED rates in the US or ensuring liquidity… In itself the level of rates is of no significance! Never forget that what matters is the level of rates versus the income increase (GDP). This ratio will lead the economy, the monetary balance and the stock to bond indices…

Payday comes at every month end. This is affixed rule. But, certain of your needs know no bound and may come up anytime when your payday is far off to help you out in meeting urgent requirements like sudden medics bills, an urgent family expense. People face this since long years back and this is the reason why lenders have come up with payday loans to help them out.

People need fast payday loans between pay periods in order to pay their bills, put food on the table, pay rent and so forth. Though people try to find cheap payday loans, they are also aware of the fact that payday quick loan companies charge a premium for their service and typically the consumer is willing to pay that premium in order to receive the payday loans they need.

Payday loans require one to have a regular job with a valid bank account and to have at least 18 years of age. They have got the online processing attached and this makes the payday loans prompt at an unmatched pace. You have to fill in a small no obligation form and as soon as you get it approved, you will get the amount of payday loans reached into your bank instantly and automatically without plugging you into any walk or paper work.

There is another flamboyant side that sparks off the payday loans speaks of the availability of these loans without any credit check. On the one side, this makes the loan processing prompt, while on the other front, it makes the loans’ openness. Now, the bad credit holders also can have the bucks of payday loans to fix their urgent problems. Payday loans are fast for everyone in the fray.

A smart consumer is an educated consumer. Taking the time to learn about fast payday loans is your best way to ensure that the payday loans you are considering can be an overall assistance to your financial outlook rather than an added burden.

Forex Market Commentary for June 17, 2008 by Cornelius Luca

GFT Daily Market Commentary

The dollar sank versus the European currencies on Monday on relief that the G8 meeting went quietly out of the way, but dollar/yen advanced. More of the same is likely today, but take some cues from the US PPI, housing and industrial production reports.

Euro/dollar

The euro/dollar should recover further today and it won’t take much to turn my model long.

Immediate resistance now comes at 1.5518. Above 1.5570, euro/dollar has strong resistance at 1.5645.

Immediate support is seen at 1.5417. Below 1.5340, support comes at 1.5287. Distant support moved to 1.5230.

Oscillators are declining.

NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen rallied to a new four-month high and my model remains long. The pair closed little changed, so it is overbought. Take profit only on a confirmation.

Above 108.60, resistance is still seen at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Above 109.93, distant resistance is perched at 110.35 from another 50-point pivot, which targets 109.85 and 110.85.

Initial support is seen at 107.95 from a 50-point pivot, which targets 107.45 and 108.45. Next strong level is at 106.75 from another 50-point pivot, which targets 106.25 and 107.25.

Oscillators are rising.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed

Sterling/dollar

Sterling/dollar rallied sharply on Monday on concern about inflation and my model went long. The short-term outlook is mixed to slightly higher, as the most strength has probably been seen.

Above 1.9687, strong resistance is now seen at 1.9760. Further resistance is perched at 1.9850.

Immediate support comes at 1.9585. The next level is 1.9500. Further support comes at 1.9410.

Oscillators are rising.

NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Mixed
LONG-TERM: Mixed

Dollar/Swiss franc

Dollar/Swiss ended marginally lower but got stuck to an inside range. The model is (barely) long. Only a close above 1.0548 signals further strength, but choppy to lower trading is likely.

Below 1.0400, support is still seen at 1.0375. This important level is followed by 1.0310. Distant support is at 1.0200.

Initial resistance remains at 1.0500. Key resistance is at 1.0548. This is followed by 1.0622.

Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish