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Sunday, March 23, 2008

The Current Talk You See About Abolishing the Fed

Challenge Accounts:

Investing Account Balance: $201.46

Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

Personal Trading Thoughts: Cash. No positions. Short - bearish outlook to sell rallies in stock market, but extremely wary as this market remains very volatile. Looking only for long positions in the Commodity Futures arena.

Personal Investing Thoughts: Cash. Bearish outlook for the market. Expecting, by the time this has played out? For 35% drawdown from highs for this bear market; but who knows, as bottoms are a process, not an event. Personal ideas? Open Swiss Bank Account with $10,000.00 USD, and start diversifying into foreign currencies. 1) Yen 2) Swiss Franc 3) U.S. Dollar 4) Euro and 5) Chinese Hyuan. I have to update my Passport I guess, and get all the paperwork for the introducing broker.

You can barely browse through YouTube's finance videos without hearing talk about abolishing the Federal Reserve. Get rid of the Fed. The Fed is the anti-christ. The Fed is doing this, and the Fed is doing that. Ben Bernake this. Ben Bernake that.

Now mind you, I hate what the Fed is doing to the strength of the Dollar right now. I'm not 'pro-Fed', but I'm not 'anti-Fed'. Consider me neutral.

But for those that want to abolish the Fed? Let's not forget the problems the Fed has helped ease, or completely eliminate over the last 100 years.

Quick question.

You abolish the Fed.

What would you have to stop the fraudulent business practices that went on before the Fed / Central Bank, and when economies were based off of a hard currency?

How would you stop panics? How would you stop instigated panics? How would you stop bank runs (both instigated and psychological) How would you stop gold hoarding with bank runs (just one tactic)? Although I believe the primary mission of the Fed has been lost, and they elongate the problems? Let's not just forget about the problems that were around over 100 years ago because we weren't there. The volatility that could be brought about at a whim, and instigated as moves to both hoard gold, and ruin a competitors business, whether your competitor was a bank or not. You could always ruin your competitors bank.

It goes back to what I said before. It's not the Fed, or free market, or the currency that is the problem. Human beings are the problem.

* * *

Investing Account Balance: $201.46
Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research and tolerance for risk.

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