In accordance with the Forex Robot team's expectations, fear has gripped global investors, resulting in a significant drop in commodity prices and the strengthening of the dollar. The economic situation in Greece has made many investors skeptical about the continued sustainability of the Euro-zone and it's currency. As in all times of fear or uncertainty, the US dollar was able to recover against other foreign currencies. A slow-down in Chinese manufacturing and high inflation are more indications that the underlying problems responsible for the near global economic collapse in 2008 are not resolved. Some analysts have even suggested that the U.S. is liable to experience a double dip recession. With US unemployment stubbornly high and inflation near record levels, Americans are spending less and saving more. We believe that any additional measures to pump funds into the US economy by the Feds would result in the near collapse of the dollar.
Archive for June, 2020
Upon watching the Republican GOP presidential debate on FOX, the Forex Robot team couldn't help but notice Ron Paul, a self described republican with a strong libertarianism tilt. After the collapse of the Soviet Union, the United States continues to have a military posture and mentality that costs American tax payers 100s of billions of dollars each year. With military bases scattered throughout the world, including places like Germany, the UK, Turkey, and Japan, the United States continues to be under the erroneous belief that it is solely responsible for ensuring global peace and security. While it should be recognized that the United States brought stability and effective democracies to both Asian countries and Europe, it is time for US foreign policy to be restructured. No other first world western country has highway bridges collapsing, while simultaneously spending billions in Iraq and Afghanistan doing nation building.
The United States has reached a critical point, and we think its current political and governmental system is antiquated and bloated. Ron Paul's position is much more honest and logical. States should have increased control over themselves, while the Federal Government should be downsized. High taxes, even higher government spend, and foreign aid should cease. The power of the government should once again be handed back to citizens of the United States. It says a lot about a country when nearly 1% of all citizens are in the prison system, for reasons that include petty crimes and marijuana usage. It is time to reconsider politics. Despite his unorthodox approach, the Forex Robot team strongly endorses Ron Paul for president.
The Arab revolt that began in Tunisia has found its way to the Alawite regime of Bashar al-Assad in Syria. What began as peaceful protests has erupted into civil strife, military massacres, and refugees. The Syrian dictator indicated in public speeches that instead of providing Syrian citizens with greater freedoms and human rights, his ruthless and savage regime will stamp out "armed gangs" and anti-government activists. CNN and other news agencies are reporting that Syrian refugees have fled to neighboring Turkey to avoid Syrian military advances and indiscriminate shootings of civilians. Unconfirmed YouTube.com and television reports show unarmed protesters holding placards and posters being shot at without warning or provocation.
Many members of the UN security council have drafted a resolution condemning Assad for his continued brutal military crackdown, but Russia promised to veto any resolution condemning its close Middle Eastern ally. What's even more surprising to the Forex Robot team is that there are sharp divisions within the Arab League concerning this issue. Some Arab states believe strong condemnation is in order, while other countries believe that it is imperative for Syria to remain a dictatorship and secure.
With all signals pointing to slowing economic growth in the United States and elsewhere, commodity prices have fallen substantially. As discussed in a former Robot Forex post, many investors are beginning to question the viability of a sustained economic recovery with burgeoning debt, high unemployment, and inflationary pressures. Another issue many Americans avoid discussing is the mass retirement of the highly skilled and hard working baby-boomer generation. Some economists have even been so bold as to suggest that the current generation is lazy and under-educated.
After an extended vacation, members of the Forex Robot team have returned to supply you with daily updates about current events that impact global economic activity and volatile foreign exchange prices. Over the past month, we have seen high trading volume in the current exchange market in addition to standard stock exchanges. Federal Reserve Chairman Ben Bernanke recently delivered a long and somber speech about the poor state of the United States economy, and the implications of poor fiscal policy, including rising debt. He made it clear to fiscal policy makers that any attempt to balance the budget should be done in a way to avoid the removal of too many federal and state jobs. He indicated that the cancellation of too many government jobs will quickly cause the economic recovery to sputter.
He also addressed the important topic of inflation in the United States. His particular opinions are sharply debated among many economists, investors, and even the Forex Robot team. He is of the belief the United States is experiencing "transitory inflation", which he believes is simply the temporary result of global increases in food and commodity prices. He failed to discuss the impact of a weakening dollar against our economic competitors and friends, such as the EU, China, Canada, and other Asian countries. Many experts say that prices at Wal-Mart stores are one of the best indicators of inflationary activity in the United States. No so long ago, Wal-Mart warned its customers to expect large and unprecedented price hikes as a result of global price increases. With serious inflation, a double dip housing market, and a recent increase in unemployment, the United States appears to be stuck in a slow economic rut for years to come.
Expect to see continued strengthening and weakening of the U.S. dollar, especially against the Euro. Many analysts agree that the Euro-Zone's currency valuation is overvalued, especially when you consider the many countries in that organization who require economic bailouts for sustainability. Additionally, the Greenback (U.S. dollar) is the only currency where foreign investors still feel most confident in times of geopolitical uncertainty.
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