John Pitera's Market Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: GROUND ZERO™ who wrote (404)	6/6/2013 1:32:39 AM
From: John Pitera	Read Replies (1) of 33421

Hi GZ , I give Sue Herrera a pass on a comment she made today that someone took exception too on the CNBC Critique Thread .... Foreign exchange rates.... cross rates are designed to be very confusing on purpose....... and as part of the Legacy system of having a Key Currency and having the Key currency quoted as the "Reference Currency"....... /$ This stuff goes back to the Money changers at the Temple ... who during the Passover period made a business of exchanging any coin with a person.... such as Roman coins with Caesar on them... or coins with Alexander the Great... which were not kosher and had to be traded in for gold or silver pieces... that could be used as offerings. The dealers pulled the same mark up on doves and lambs that were brought as offerings....the dealers found them to be "with defective and not worthy of an offering to Yahweh" ....they then exchanged another dove for the bad dove and dropped it back into their inventory...... (just as a side note.... when you do a careful reading of the Gospels.... we find that this was the only time that Jesus utilized physical force... and the threat of physical force in the Bible.... do a google image search on Jesus clearing the temple of the money changers.) When the British Pound Sterling "Cable" was the world Key currency prior to 1931..... it was the reference currency and in the spot and forward markets.... the GBP/$ was the terms it was quoted in.... this is carried on to this day in a few commonwealth countries..... AUD/$ and the Kiwi buck.... after the Bretton Woods Monetary Summit up in Vermont after WWII... The good old US Dollar became the official key currencies and currencies such as Marks, Yen Swiss...... $/DEM, $/JPY, $/CHF.... the scandies... $/NOK etc were all quoted with the USD BEING THE REFERENCE CURRENCY....THIS IS THE KEY CONCEPT TO UNDERSTAND *REPEAT: THE REFERENCE CURRENCY IS THE ONE TO THE LEFT IN THE CURRENCY PAIR.... CROSS RATE...FOR THOSE WHO CAN READ A TABLE......* REPEAT....... ok Now to make this a true double down in Texas No-Hold em terms..... when the good folks at the CME...... Chicago mercantile exchange.... decided that it was time to get into this currency trading game..... the Bankers were making way too much money... with spreads you could drive a 787 through..... they figured.... OK we need a SPIN on the way the interbank market quotes prices...... and the really smart bankers/ Brokers... especially the firms like LEHMAN, Salomon Brothers.... Goldman... Bankers Trust, Chemical, Mannie Hannie etc... decided to flip the futures so that they moved inversely to the interbank spot quote.... This was after Nixon closed the Gold window in 1971... AS the Europeans were getting sick of the monopoly money that LBJ started printing in 1966 with his landmark ... great society.... guns and butter.... expansion of the Vietnamese war...etc.... so since the USD was in free fall when the CME created the currency futures... and people like to go long... the CME obliged them and set it up that way.... So as George Goodman aka ADAM SMITH commented ... as was commented in the second interview in The first Market Wizards book... ... everyone gets what they want from the markets..... as they pretty much do from life.. JOHN JACOB PITERA ---------------------------- person PS.... and mea culpa.... As you well know from our live time experiment ..... I am perfectly capable of putting on an improperly hedged EUR/JPY Futures cross position that goes up over 10 K in 12 hours...... and then not listen to your perfectly correct advice to " close it and take the profit".... and to sit around twiddling my thumbs and have it turn into a 12K loss the next day..... at least we had a stop loss..... I should not be the General Managing Partner of a book of Matches from the local Papasitos restaurant here in Houston...... but, as Clint Eastwood famously said.... "A Man has got to know his limitations"....... I think... I have been figuring out a small subset of mine ........ ----very big grin---- Your old running buddy....of sorts... John..... This is reminding me ..what is the good Doctor Michael Chen up to these days... Maybe Austin....C knows...... the all knowing man from Boston..... as does Doc Tommy D.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next