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Rally into 2023? Likely rally into 2023, spurred by downward trend in inflation. Likely 25bp hike at next meeting, then full stop to evaluate the damage (and give time for lagging economic data to catch up to policy changes). Unemployment will rise, possibly some deflation, and fed will cut rates towards the end of 2023 in response to negative economic data. This will cause a second drawdown. Well, the rates will be correlated with a second drawdown, but the real correlation will be between the negative data and equities. My initial thoughts as we move into a new year. Should be an interesting one. Love, InTheMoney
NASDAQ:QQQLong
by InTheMoneyAdam
8
How to use ECONOMIC INDICATORS for informed trading decisionsHello everyone! Here you have some information that I consider useful on how to interpret and use economic indicators and data to make informed trading decisions in the foreign exchange market: GDP (Gross Domestic Product) - GDP is a measure of a country's economic output and is considered to be one of the most important indicators of economic growth. A higher GDP indicates a stronger economy, which can lead to an increase in demand for the country's currency. Unemployment Rates - Unemployment rates measure the percentage of the workforce that is currently without a job. A low unemployment rate indicates a strong economy, which can lead to an increase in demand for the country's currency. Inflation - Inflation measures the rate at which the average price level of a basket of goods and services in an economy is increasing. High inflation can lead to a decrease in demand for the country's currency, while low inflation can lead to an increase in demand. Interest Rates - Interest rates are the cost of borrowing money and are set by central banks. High interest rates can attract foreign investment, leading to an increase in demand for the country's currency. Trade Balance - The trade balance measures the difference between a country's exports and imports. A positive trade balance indicates that a country is exporting more than it is importing, which can lead to an increase in demand for the country's currency. Political Stability - Political stability is an important factor to consider when trading in the foreign exchange market. A stable political environment can lead to an increase in demand for a country's currency, while political instability can lead to a decrease in demand. In summary, GDP, unemployment rates, inflation, interest rates, trade balance and political stability are important economic indicators to keep an eye on when making trading decisions in the foreign exchange market. By considering these indicators, along with other market conditions, traders can make more informed decisions about when to buy or sell a particular currency. Please note that the above information is not a financial advice and only for educational purpose, Economic indicators are important but not the only factor to consider while making trading decisions and It's always important to do your own research and consider your own risk tolerance before making any trades.
Education
by m_maia14
Recession on the Horizon - FOMC and LayoffsYesterday, the FOMC confirmed the backing of higher interest rates for longer. The market reacted negatively signaling negative sentiment on rate expectations for the following quarters. Federal Reserve official, Neel Kashkari, who often has the most dovish views on market anticipation stated that inflation may have peaked but sees interest rates rising higher for the next few meetings. He sees the FED raising rates by a whole percentage point from the current level of 4.25%-4.5% to 5.4% (MarketWatch, Jan. 5). The inflation fight is not over yet, and it remains sticky despite all the economic weakening observed. In a previous thesis where I challenged the US economy about a year ago, I warn of massive layoffs in 2023 despite most analysts and the Fed saying otherwise. Meta and Tesla have already laid off thousands of employees just months ago. Today, large layoffs in tech are happening with Salesforce: “layoff about 10% of its employees, the company also says it will close some offices as part of its recruiting plan, but it is still unclear if any of the bay area offices will be impacted, undertaking major cost cuts in a challenging economy.” (CNBC, Jan. 5). Amazon Chief Executive Andy informed his employees that the number of layoffs in the company has now been increased to more than 18000 roles (ArabianBusiness, Jan. 5). Other firms are cost cutting, most cutting employee benefits. It is just a matter of when or not we are going to see higher unemployment rates in 2023. The most obvious fundamental reason for these layoffs and cost cuts is the fact that all these companies responded to the “bubble” fueled by stimulus and extensive quantitative easing. As a response, the Fed is raising interest higher, and tightening the monetary policy and we see the equity evaluation of these companies dropping significantly. Eventually, that demand is gone, and these companies are left with thousands of employees hired in response to a "fake" demand, over-hired. As equity evaluation is going down, they have to improve the margins by laying off employees and reducing expenses since revenue is going down. I see another reason for large layoffs, perhaps, a more IMPORTANT and IMMEDIATE aspect. Salesforce admitted business activities going down, demand slowing, and growth staggering, however, their stock went higher because they laid off employees, reducing their expenses. On paper, it shows higher margins, and thus, the stock reacted positively. What can become a norm during this economic environment is that we see more companies, especially in the tech industry which saw major lows, employing this technic by raising their stock prices with restructuring and engaging in mass layoffs. My plan of limiting my exposure to risks has not changed. I am holding a majority in cash and short-term government bonds. Looking to increase exposure to my trading in gold when the US 10-Year Real Rates falls from the inverse correlation between the two. Reminder: Higher real yields = expensive to hold gold when compared to other yielding investments such as fixed income, thus the inverse correlation on the charts. This is for personal recording but feel free to comment and argue.
NYSE:CRMShort
by ssavi
Outlook through Friday jan 6 - 1 day - SPYThis is more about momentum than exact numbers over the next 2 days. Tomorrow, the jobless claims and Job Cuts reports come out at 8:30am. Typically this doesn't matter but in the current economic situation we should be seeing some volatility early before market open. I am expecting a slightly positive report because they have been becoming more positive, although shy of targets. The market may pop for the first couple of hours before dying down. People will be selling off tomorrow for the incoming report on Friday. Before the market opens on Friday the US Employment Situation report comes out. I think this could trigger a bigger sell off because I think the US employment situation is still strong. The FED doesn't have the unemployment where they want it signaling they will probably have to keep raising interest rates. Feedback is appreciated! Not financial advice
AMEX:SPYShort
by Adventure_Joe
1
Interest rate up to at least 6.5% in 2023, why?The Fed chairman has given the market a very important clue on 13 Dec 22. At what level will he consider an interest rate cut? He said “I wouldn't see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way,” meaning only if CPI is heading nearing 2% then it is hopeful to see a rate cut. Market consensus for CPI to range between 5% to 8% for this year. If this is the case in 2023, the Fed is likely to continue to hike the rate moderately at 0.25% in each meeting just to bring inflation down. I am seeing this as the best case scenario. We can participate in hedging the market and trading the interest rate in this example. CME Micro 30 Year Yield Futures Minimum fluctuation 0.001 point = $1 0.01 point = $10 0.1 point = $100 1 point = $1,000 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com I hope this tutorial will be helpful, in enabling you to read into the market with greater clarity. Stay-tune for the video version shortly, we will do more in-depth study.
TVC:US30YLong
by konhow
1
2Yr Yield creeping up slowly$TNX is closed atm but if the 2yr is an indication it may open higher We re-entered long yield after FED day in DEC. Sold puts on $TYO & bought common Didn't go heavy because Monthly chart is a tad tough. Weekly 2yr trading decently above avg's again So far so good. We were bullish on STOCKS but that was late Oct/Early Nov, then went bearish for a bit, & are now NEUTRAL. EDIT: Keep in mind that in BULL MARKETS items can remain OVERBOUGHT for long periods of time.
TVC:US02Y
by ROYAL_OAK_INC
US10Y 🇺🇸 U.S. 10-Year Interest Rate History (1913 - 2022) One of the biggest "shocks" in the 22' financial markets is the breaking of the long-term (weekly) trend in Interest Rates — specifically the U.S. 10-Year Treasury (US10Y), which has gone through now two long-term trend cycles since it’s history dating back to 1913. Given the inflation fight that the Federal Reserve is currently waging, while at the same time keeping in mind the structural debt-load that the U.S. 🇺🇸 is current burdened with, this begs the question can rates actually go higher from here? While we do not know the answer as to the actual trajectory of interest rates into 23’ and beyond — what we do know is that given the structural debt load, we can speculate that at some point rates will likely be forced lower as a proxy of stabilizing inflation and also total debt servicing obligations of the U.S. Government. 
Also keep in mind comments by J. Powell and the Federal Reserve as they have been preparing investors for a new macro regime of “higher for longer” . Should this actually play out and not just be the "hawkish tone" of the Federal Reserve that is helping to push interest rates higher, investors must consider the ramifications that could come IF we have truly entered a new (rising) interest rate regime that includes structurally higher rates as part of the next 40+ year historical cycles. Here is the same chart of the (US10Y) paired against the backdrop of other macro indicators including Federal Reserve Balance Sheet, as they give us insight as to both the bull and bear thesis for yields moving forward: U.S. 10-Year (US10Y) vs. Fed Funds Rate (FEDFUNDS) 📊 U.S. 10-Year (US10Y) vs. U.S. Inflation Rate YoY (USIRYY) 📊 U.S. 10-Year (US10Y) vs. U.S. Federal Debt Total Public (GFDEBTN) 📊 U.S. 10-Year (US10Y) vs. U.S. Federal Reserve Central Bank Balance Sheet (USCBBS) 📊 U.S. 10-Year (US10Y) vs. U.S. Liabilities & Capital (WRESBAL) 📊 U.S. 10-Year (US10Y) vs. S&P 500 (SPX, SPY) 📊 U.S. 10-Year (US10Y) vs. Dow Jones Industrial Average (DJIA, DIA) 📊 What is your take on the forward trajectory of interest rates? Have we officially broken the 40+ year downtrend on structurally low interest rates, given the potential for entrenched inflationary pressures within the U.S. economy? Or, will rates be forced lower as structural debt obligations of the U.S. are far too great to support the notion of "higher yields for longer"? Let us know your thoughts in the comments below! 👇🏼
TVC:US10Y
by kylemusserco
2
Tesla TSLA Market Cycle Signaling Capitulation Stage Coming? Lots of hype about the moves as of late in Tesla TSLA stock price, so I wanted to compare the Market Psychology & Cycle Timing phases to the Monthly Chart on TSLA. Do you think we are in the latter stages moving toward capitulation ? My take is that if we see a bounce from these levels into the new year (January 23'), it is likely another opportunity to short TSLA to under <$100 per share — potentially to a long-term trendline on the monthly chart that resides in the $80 area. Monthly TSLA Market Psychology & Cycle Timing 📊 Monthly Chart w/ Regression Channel Weekly TSLA Market Psychology & Cycle Timing 📊 Weekly Chart w/ Regression Channel Daily TSLA Market Psychology & Cycle Timing 📊 Daily Chart w/ Regression Channel Monthly TSLA Market Psychology & Cycle Timing w/ Yearly Returns Since IPO 📊 Indicator by @tradingview user @Botnet101 Indicator by @tradingview user @everget
NASDAQ:TSLAShort
by kylemusserco
2
10Y Rate - Headed HigherToday you can review the technical analysis idea on a 1W linear scale chart for 10 Year Treasury Yield (TNX). In December 2021, I posted a chart showing that the 10Y rate was going to go much higher. I was exactly on point almost to the exact number. Today I was reviewing the 10Y rate chart and saw the RSI formed a double bottom base with the 10Y rate ready to make another move higher. I also added in the Keltner Channel indicator which shows that when the 10Y rate is higher than the median line, there is a strong chance it touches the top of the Keltner Channel. I see the 10Y as well as other long term rates going much higher as shown in the chart. If you enjoy my ideas, feel free to like it and drop in a comment. I love reading your comments below. Disclosure: This is just my opinion and not any type of financial advice. I enjoy charting and discussing technical analysis. Don't trade based on my advice. Do your own research! #millionaireeconomics
TVC:TNX
by MillionaireEconomics
1
All eyes on Fed's Interest Rate~~**Repost from Dec 14th 2022 since the original post disappeared** Though the CPI figures released last night were lower than expected, if you look one by one, you will notice that the price of services (Core Services) has not yet decreased, but food and oil prices have. TVC:GOLD As a result, let's keep our eyes on the Federal Reserve's interest rate announcement in upcoming hours, which many agencies, including Oxford Economics, Bloomberg, Forex Factory, and Trading Economics, expect to be 0.5%. If the Fed remains concerned and interest rates rise more than expected (0.5%), gold will take another ride up the hill tonight. If not, we should brace ourselves for a trip to Death Valley. Let's prepare for a ride~~
TVC:GOLD
by ChartTrail
FOMC Economic Projections Effect on GoldOANDA:XAUUSD **Repost from Dec 14th 2022 since the original post disappeared** Hello all TradingView speculators, In my opinion, I think there was an overreaction from the market's participation on the CPI numbers that was announced to be lower than expected. In addition to this, some technical indicators are showing us some signals to be careful on the buy side from bearish divergence signal between the price and RSI on 4H timeframe. This indication does not mean that the trend will reverse immediately but it indicates that the current trend has chances of stopping and turn into either sideway or downtrend in short term. Based on the current price level, Risk to Reward Ratio seems to be in favor of the bears. However, I would wait to see the price action in 1H timeframe tries to test 1815 first and if it fails then I believe that follow sell position after this price action fails to go above 1815 and if price makes a lower low below 1804 can be a worthy trade
OANDA:XAUUSDShort
by ChartTrail
3
FOMC Rates Decision and the Effect on Gold**Repost from Dec 13th 2022 since the original post disappeared** Economic indicators from the past month indicate that the price of services is the key factor that helps prevent a rapid decline in inflation , although the price of goods had already dropped considerably and the labor market remained strong, showing no signs of slowing down the inflation rate. ECONOMICS:USCPMI In the graph above, one of the key economic indicators, the ISM Service Sector Index for the month of November, accelerated to 56.5, above the forecasted rate of 53.5 and the previous month's level of 54.4. Despite the rise in interest rates from the FED, the ISM indicated that the services sector is still going strong, correlating with the positive outcome in labor market data. FOMC Rates Decision 15 December 2022 Previous = 3.75-4.00% - Prediction from Bloomberg, OE, Forex Factory, Trading Economics = 4.25-4.50% Bloomberg, Oxford Economics, the Forex Factory, and Trading Economics predict that the Federal Reserve's interest rate will rise by 0.50%. The market forecast for the highest interest rate as of December 9, 2022 is 4.75-5.00% in May 2023, with a gradual decrease beginning in the third quarter of 2023. However, because the services sector has been performing well, the FED's interest rate cut may come later than expected by the market. Thus, from a fundamental standpoint, the USD is expected to continue appreciating, albeit not as strongly as in recent months. On the other hand, the gold price is expected to fall.
UShort
by ChartTrail
THE IMPACT OF INTEREST RATES ON FOREX MARKETHello again! Interest rates can have a significant impact on the forex market , as they can affect the demand for and supply of different currencies. In general, higher interest rates tend to attract foreign investment and increase the demand for a currency, as investors can earn a higher return on their investments. This can lead to an appreciation of the currency in the foreign exchange market. On the other hand, lower interest rates may discourage foreign investment and reduce the demand for a currency, leading to a depreciation of the currency in the forex market. Interest rates can also affect the attractiveness of a country's assets, such as stocks and bonds, which can in turn affect the demand for its currency. For example, if a country has high interest rates, its assets may be more attractive to foreign investors, leading to an increase in demand for the country's currency. In addition to the interest rate level, the direction and pace of change in interest rates can also affect the forex market. If a central bank is expected to increase interest rates in the near future, it may lead to an appreciation of the currency, as investors anticipate higher returns on their investments. On the other hand, if a central bank is expected to lower interest rates, it may lead to a depreciation of the currency. Overall, the relationship between interest rates and the forex market is complex and can be influenced by a variety of factors, including economic conditions, inflation expectations, and global market conditions.
OANDA:XAUUSDEducation
by m_maia14
ECONOMIC CYCLE & INTEREST RATESHello traders and future traders! The state of an economy can be either growing or shrinking. When an economy is growing, it typically leads to improved conditions for individuals and businesses. Conversely, when an economy is shrinking or experiencing a recession, it can have negative consequences. The central bank works to maintain a stable level of inflation and support moderate economic growth through the management of interest rates. What is an economic cycle? An economic cycle refers to the fluctuations or ups and downs in economic activity over a period of time. These cycles are typically characterized by periods of economic growth and expansion, followed by periods of contraction or recession. Economic cycles are often measured by changes in gross domestic product (GDP) and other economic indicators, such as employment, consumer spending, and business investment. Economic cycles can be caused by a variety of factors, including changes in monetary and fiscal policy, shifts in consumer and business confidence, and changes in global economic conditions. Economic cycles can also be influenced by external events, such as natural disasters or political instability. Understanding economic cycles is important for businesses, governments, and individuals, as it helps them anticipate and prepare for changes in the economy and make informed decisions about investment, hiring, and other economic activities. How is an economic cycle related to interest rates? Interest rates can be an important factor in the economic cycle . During a period of economic expansion, demand for credit typically increases, as businesses and consumers borrow money to make investments and purchases. As a result, interest rates may rise to control the demand for credit and prevent the economy from overheating. Higher interest rates can also encourage saving, which can help to balance out the increased spending that often occurs during an economic expansion. On the other hand, during a period of economic contraction or recession, demand for credit tends to decline, as businesses and consumers become more cautious about borrowing and spending. In response, central banks may lower interest rates to stimulate demand for credit and encourage economic activity. Lower interest rates can also make borrowing cheaper and more attractive, which can help to boost spending and support economic growth. Overall, the relationship between interest rates and the economic cycle can be complex and dynamic, and the direction and magnitude of changes in interest rates can depend on a variety of factors, including economic conditions, inflation expectations, and the goals and objectives of central banks and other policy makers. I hope you leant something new today!
Education
by m_maia14
The Cantillon Effect And The Working ClassThe Cantillon effect is an economic phenomenon that disproportionately affects the working class. It's named after the 18th century French economist Richard Cantillon, who first studied the differences in income distribution between the wealthiest and poorest parts of society. In this blog post, we'll be exploring how the Cantillon effect works, and how it impacts the working class. Keep reading to learn more. Introduction to the Cantillon Effect The Cantillon Effect is an economic concept that explains how money creation benefits those at the beginning of the money supply chain and harms those at the end. It is an example of how the economy is rigged to work in favor of some, while leaving others behind. The new money created gives those at the top access to resources before new money reaches everyone else. They use this new money to purchase assets, goods, and services before prices increase. This furthers a cycle of wealth inequality, since those with new money get wealthier faster than those without. Understanding the Cantillon Effect is essential for anyone looking to create a more equitable and prosperous economy for all. It is an example of how the economy is designed to favor those with access to monetary policy decisions, such as banks and large corporations. This means wages for everyday workers remain stagnant while those at the top, with influence and resources, reap the rewards of increased wages and greater purchasing power. So while wages may stay the same, prices of goods and services are constantly increasing - ensuring more money flows to those in charge. The result is an economy that is severely rigged in favor of those who have access to the levers of power, leaving everyday workers struggling to make ends meet. This effect can be seen in the widening wealth gap between the wealthy and poor, as well as the increasing income inequality in many countries around the world Additionally, the economy is heavily biased towards the wealthy, as evidenced by the massive corporate tax cuts and government bailouts that are disproportionally directed to large businesses and the affluent. This allows them to systematically hoard money while wages stagnate and regular people struggle to make ends meet. The result is an unfair system that benefits a small number of people while impoverishing countless others. It's time we take action and make sure the economy works for everyone, regardless of wealth and privilege. Analyzing the Distributional Impact of the Cantillon Effect The Cantillon Effect is the redistribution of wealth from lower to upper income brackets through inflation and other economic policies. It works like a hidden tax on earnings, taking purchasing power away from lower-income communities and giving it back to the wealthy through an ever-widening economic gap. This uneven playing field is created by policies such as high interest rates and quantitative easing that are designed to benefit those with investments and business interests. By implementing these strategies, the government is essentially rigging the game in favor of those with earnings and investments, while leaving those with less earnings behind. This creates an unbalanced economy that works for some, but not for others. It can be seen as a regressive tax, as it disproportionately impacts lower-income individuals and families more than those with higher incomes. This is an effort to explain how the economy is rigged to work for some and not others. Without a basic understanding of how the economic processes are designed, those of lower income are at a disadvantage since they lack the resources necessary to make their voices heard in the power structures that determine economic outcomes. Income inequality has widened across the country, leaving many people feeling like they don't have a fair chance to succeed in today's economy. Unfortunately, this rigged system works against those who are already at a disadvantage due to limited resources and opportunity. By analyzing the distributional impacts of this effect, we can gain a better understanding of how the economy is rigged to benefit some and not others Finally, it is clear that the working class has been severely affected by the fact that the economy is designed to work for some and not others. Through analyzing the distributional impacts of this effect, we can gain a better understanding of how the system is rigged and how to address it. It is essential that working people have access to fair, equitable economic opportunities and that we work together to ensure that this system is working for everyone. Who Benefits from the Cantillon Effect? The Cantillon Effect is a phenomenon that benefits those with access to new money before it reaches the general population. This is especially true when it comes to working class people, who usually struggle to keep their heads above water. Through this effect, individuals and businesses that are among the first to receive new money from a central bank’s stimulus package can benefit significantly before the working class ever sees any of it. This means the working class is essentially locked out of the opportunity to utilize new money to its full potential, essentially rigging the economy in favor of those with access to new money first. Historically, this has been the wealthy elite, who are able to use their money and influence to acquire more resources faster than others. This unequal system creates losers and winners, with those who have access to more money and resources having an undeniable advantage over those who don't. The result is an economy that works in favor of the wealthy elite, leaving the rest of us struggling for scraps. Not only does this create a gap between the ‘haves’ and ‘have-nots’, but it also limits economic opportunities as resources become increasingly concentrated in fewer hands. It’s clear that this system of economic inequality needs to be addressed in order to create a fairer economy that works for everyone. The Cantillon Effect is a major factor in income inequality, as those with the most money are able to benefit from price changes before everyone else does Next, it is important to recognize that the losers in the economic rig are those without easy access to capital or privileged information. The Cantillon Effect is a prime example of how those with the most money can benefit from capital before everyone else does and this serves to create an even larger gap in income inequality. It is within our power to change this system that so unfairly works for some and not others and it is worth fighting for a system where everyone has an equal chance at success. The Working Class and Its Inequitable Access to Resources The working class, particularly low-income and minority groups, often lack access to resources such as quality education and healthcare, leading to economic instability and inequality. This lack of access to resources, combined with less job security and decreased wages, creates a working environment that prevents working class people from achieving economic stability and success. To make matters worse, many working class individuals are also hindered by government policies that have been crafted to favor the wealthy. This is why the current economy is often referred to as "rigged," working for some while leaving others behind. It is our collective responsibility to ensure the working class has equal access to the same resources as wealthier individuals so they can create a more financially secure future. This is compounded by the unequal distribution of wealth amongst different classes, as those in the upper classes have more resources to acquire and increase their wealth. While it may appear that winners consistently come out on top, the reality is that their success is heavily influenced by the economic systems that are designed to work in their favor. For example, wealthy individuals can access tax incentives and investments which are not available to those with lower incomes. Furthermore, those with more money can influence the outcome of legislation, creating more winners and, unfortunately, more losers. It's a rigged system that keeps people in different financial classes divided and ensures that some individuals have access to more opportunities than others. In order to fix this injustice, policies should be enacted that support and empower those of lower income levels so that they can gain access to the same opportunities and resources available to the wealthy few Also, earnings should be made more equitable by instituting a better minimum wage, reducing earnings inequality and providing more training, education and job opportunities. These policies have the potential to create a more level playing field in the economy where individuals of all income levels have the same chances of success, which will ultimately benefit everyone. How Governments Are Failing to Redress Inequality Governments around the world are failing to implement policies that would promote economic equality and reduce inequality. This is especially tragic, considering working class families are the ones that suffer the most. The way our economy is currently set up, working class individuals lack the opportunity to ever rise up and gain economic security. Those with money, however, can benefit from tax breaks, investment opportunities, and other benefits that are often denied to working-class citizens. This blatant injustice needs to be addressed in order for working-class families to have a chance at achieving a comfortable financial future. This includes inadequate levels of taxation for wealthy individuals, as well as failing to enact taxes on capital gains and other investments. To add to this, inflation plays a vital role in how the economy is rigged in favor of the wealthy. Through inflation, the value of money decreases, making it harder for people to stay afloat and even harder for those with less money to maintain their standard of living. As inflation continues to devalue money, those at the top are able to remain wealthier than those who are not as fortunate. Furthermore, governments often favor large corporations through generous subsidies and tax breaks which further exacerbate the divide between the haves and the have-nots However, recessions are the most apparent example of how the economy is rigged to benefit some and not others. During recessions, large corporations are more likely to receive bailouts while those on the margins of society, who often have no savings or access to credit, face increasing unemployment, poverty and homelessness. Furthermore, governments often favor large corporations through generous subsidies and tax breaks which further exacerbate the divide between the haves and the have-nots. It's clear that our economic system is still broken and needs fundamental reform in order to create a fairer environment where everyone can prosper. Moving Forward: Proposals for Change We need to address underlying issues in the economy such as inequality, corporate monopolies, and the lack of opportunities for those with lower incomes in order to create a fairer working environment for all. The working class are particularly affected by the power imbalances that exist in the economy, where their wages and working conditions can be heavily impacted by large corporations. This is further exacerbated by an unjust taxation system that favor's those in higher socioeconomic positions, creating even more inequality and unfairness. If we aim to create a just economy where all have an equal chance to succeed, we must address these issues head-on. Only then can we create a more equitable system that truly works for everyone. We should focus on creating fair and equitable policies that are beneficial to everyone, regardless of income or background. Unfortunately, the current economic system is often designed to benefit those who already have money and new wealth creation opportunities. This means those with economic privilege and access to new money often continue to be the primary beneficiaries of financial resources, leaving those without money excluded from participating in new economic projects. With new policies and regulations that prioritize economic inclusion and justice, more people can benefit from new money creation opportunities, creating a more equitable economy. We need to invest in education, job training, and other initiatives that help those at risk of being marginalized by the current economic system Additionally, inflation is another factor that works against those with lower incomes. As inflation rises, their money is worth less and less, making it difficult for them to afford even the most basic necessities. To combat this, policy changes need to be made to ensure inflation does not adversely affect those with lower incomes. We also need to invest in education, job training, and other initiatives that help those at risk of being marginalized by the current economic system. Only then can we create a fair and equitable economy that works for everyone. In conclusion, the Cantillon effect is a complicated economic phenomenon that impacts the working class more than any other part of society, and results in a widening gap between the wealthiest and poorest individuals. It's important for us to understand this phenomenon and its implications, so that we can work towards more equitable economic policies in order to create a fairer and more prosperous society for all. Articles sourced for this paper Mainstream economists generally confine the discussion of the Richard Cantillon Effect to redistribution of wealth that occurs with a rise in the quantity of money. The Cantillon effect is the unequal shift in relative prices that results from changes in the money supply, which was first described by the 18th-century economist Richard Cantillon (who inspired political economists such as Adam Smith and David Ricardo). The basic thrust of Richard Cantillons extensive analysis is that changes in money lead to changes in relative prices, which alter productive plans and lead to different fixed investment patterns, so that the new money changes the real economy, with winners and losers. In The Essay, the economist Richard Cantillon describes the economic phenomenon of changes in relative prices across various parts of the economy in response to changes in money supply. The Cantillon effect refers to an unequal distribution of the new money supply throughout the economy, which leads to different rates of growth in different parts of the economy. The basic contours of the Cantillon effect, namely, some individuals having more purchasing power while others having less, are still at work in the same economy, if money creation channels allow them to do so. Cantons best-known idea, the eponymous Cantillon effect, describes the effects of the creation of money on the relative prices and inequality in wealth in society. In comparison, the Cantillon effect, the neglected classic theory on how money allocation affects personal wealth, is among the inequities of our present-day society. The Cantillon effect claims that the first recipients of new supplies of money are given an arbitrage opportunity, the ability to spend the money before prices rise. Changing the supply of money in the economy in order to manipulate relative price levels does not really change anything over the long term. In fact, even price-stabilized economies need injections of money to counteract deflationary effects from economic growth. They are seeing asset prices rise, but prices are still falling across the rest of the economy, because that is happening just seconds after the Federal Reserve is clearly bloating up the money supply. Specific parties get the chance to spend the new paper money on goods and assets that do not have prices reflecting an increased money supply. In the modern economic context, Cantillons theory implies that banks and major institutional investors get access first to new supplies of money, invest them to earn returns, e.g., on stock markets or various risky financial products, and drive up the prices of assets in which they invest. Because the terms inflation and deflation refer to broad, economy-wide changes in prices, the name biflation is a bit misleading, since it does not necessarily refer to any increases or declines in the overall price level, but rather to changes in relative prices caused by changes in the supply of money and credit in various markets. Cantillons own analysis also does not appear to incorporate Austrians own inescapable characteristics of booms and busts associated with the emergence of new money into credit markets; for Cantillon, all new money has a similar redistributive, unequal impact, regardless of whether it is spent in real economies or is introduced into the credit markets, which lowers interest rates. Cited Sources www.investopedia.com 0 www.spencertom.com 1 river.com 2 fee.org 3 mises.org 4 phemex.com 5 www.aier.org 6 www.promarket.org 7 cointelegraph.com 8
OANDA:SPX500USD
by RobinhoodFX
4
6 Reasons why the gold price will drop with interest rate hikes The FOMC announced another 50bps (0.50%) Interest Rate increase to 4.50% which has lead to short term downside for gold as an initial reaction. The question for many remains. Why does gold drop when interest rates rise? There are a number of reasons, but here are the top 5… #1: Investors look elsewhere Higher interest rates can make other investments, such as fixed investment assets and bonds, more attractive to investors. Gold investors will then sell their gold holdings and take advantage of higher interest rate yielding assets. This can lead to investors moving their money out of gold, which can lead to a drop in price. #2: Stronger U.S Dollar A higher U.S dollar can lead to gold being more expensive for investors who use other currencies to buy it. This can lead to a drop in demand for gold, which brings the price lower. #3: Higher borrowing costs When interest rates rise, this increases the costs of borrowing for business and consumers. They now need to pay more to borrow money to fund their operations. This can hamper the economic activity and drop the demand for buying stocks, precious metals and other investments. #4: Higher yields on gold-mining companies bonds Fixed investment gold bonds may seem more attractive than holding and investing in gold itself. This leads to a drop in gold mining stocks which essentially helps with the drop in gold. #5: More supply less demand With the factors I mentioned above, with investors leaving gold this increases the supply of the metal and decreases the demand. This leads to a drop in the gold price. #6: Uncertainty floods the markets When interest rates go up, this leads to uncertainty in financial markets (where gold is no exception). Investors feel the uncertainty and become worried for the economy. This can lead to a decrease in demand for gold and a drop in its price. These are all speculations in theory with why the gold price may drop with an increase in interest rates. We notice that the markets don’t always play according… Since the May 2022 Gold has moved in a sideways consolidation pattern. And this means, we can see the price continue in the range. Until we actually see a break up or down, the analysis in the medium term is sideways. We’ll be watching this carefully. Follow for more trading and fundamentals tips and analyses from the info I've learnt over the last 20 years as a trader. Trade well, live free. Timon MATI Trader Higher interest rates can also lead to higher yields on gold-mining companies' bonds, which can make these bonds more attractive to investors. This can lead to a decrease in demand for gold-mining stocks and a drop in the price of gold. Higher interest rates can also increase the opportunity cost of holding gold, as the metal does not generate any income or interest. This can make investors less likely to hold onto gold as a long-term investment. Gold is often seen as a hedge against inflation, and higher interest rates can signal that the central bank is trying to keep inflation in check. This can reduce the perceived need for gold as a hedge and lead to a drop in its price.
COMEX:GC1!Education
by Timonrosso
1
AW 10YR\INTEREST RATES ANALYSIS - Coiling Up for Higher Rates...In this video I explain my long-term view on 10 Year Bond Yields also known as Interest Rates. If there is one view of mine that has stood the test of time it is my view of this chart. My timing couldn't be better if what I talk about in this video comes to pass. It appears that we have just completed what appears to be the first wave of the upcoming 5-Wave move for Wave E. This pattern has been unfolding since at least 1100AD and it still hasn't completed yet. It provides so many clues as to what is coming in the not-so-distant future. There is no better time to learn how the waves operate in these psychology driven markets. Remember to use Disciplined Money Management Principles to ensure longevity as a trader. If you don't know the long term pattern shouldn't you be doing your research instead of just following the crowd? Just remember: I am not a financial adviser; I suggest using this only as a guide. Always do your own research.
TVC:TNX
by AriasWave