Brian Twomey: FXSTREET LIVE ANALYSIS ROOM

Brian Twomey with brother Dale, Fxstreet, Live Analysis Room, Last Quadrant http://www.fxstreet.com/analysis/forex-live-analysis-room-interviews/2016/02/04/03/

Brian Twomey With Brother Dale, Fxstreet, Live Analysis Room, Currency Market Rules and Markets are changing, http://www.fxstreet.com/analysis/forex-live-analysis-room-interviews/2016/02/08/04/

Encourage all to read the Silvio Gesell Negative Interest Rate Perspectives on site here to incorporate a complete understanding what’s ahead in our markets by Negative Interest Rates. Unless Gesell is read particularly the 1891 paper then to understand negative interest rates is literally futile. This negative interest rate period is new yet revolutionary in its timing and revamp of the current Keynesian structure. Keynes is finally knocked off his long standing 2008 plateau to hopefully Rest in Peace where he belongs. I’m not sure I have a problem with Gesell’s economic approach in negative interest rates but its the 4th Quadrants of markets in the timing introduction. Implementation will take time for all CB’s to adopt, its a structural approach. Generally markets take 1 year to adjust to new changes. That means volatility will be seen for a while longer yet the massive slowdown will be seen. Let me offer what structural changes and volatility means.

From 1972 – 1979, DEM/USD saw 2 years when + 1000 pip years were seen. Those times were 1974 – 75 and 1978 – 1979. That was Gas lines and Iran hostage crisis.

1980’s were the best years in currency markets in all 45 years of the free float. The beginning 1980’s was boom economic times under Ronald Reagan. 1983 was AUD Free Float introduction. 1985 was the Plaza Accords, 1987 was Louvre that reversed Plaza two years later. DEM/USD saw 7 times of + 1000 pip years. 1980 – 1981, + 1853 pips. 1981 – 1982 saw +2014 pips. In 1983 – 1984 saw +1608 pips. 1985 – 1986 saw + 1880 pips while 1986 – 1987 and 1987 – 1988 each saw +2304 and +1352 pip years. 1988 – 1989 saw 1246 pips. 1987 was a crisis year.

1990’s. From EURO introduction 3 times saw + 1000 pip years. 1990 – 1991 saw 1572, 93 – 1994 saw 1063 and 1997 – 1998 saw 1430 pips. Years 1990 – 1991 was Iraqi War, 1994 was Mexican Peso crisis and 1997 was Russian Ruble and Thai Bhat.

1999 – 2010 saw 4 times of + 1000 pip years and 3 times in the 900 pips. Resembled the 1980’s. 1999- 2000 = 1462 pips, 2002 – 2003 = 1825 pips, 2007 – 2008 saw 1639 pips. The point in 2001 was terrorists who blew up the World Trade Center while 2007 – 2008 was Housing Crisis.

2010 to Current. This period is seriously under performing and is easily the worst decade seen in 45 years of currency trading. 2010 – 2014 saw collectively a total of 2000 pips. This is by far the lowest since the January 1972 Free Float. its unheard of in market terms to ever see an event such as this but its been recoup by Central banks in never ending crisis mode. 2014 – 2015 saw + 1702 pips while 2015 – 2016 saw 1141.

Collectively, 1970 decade = 6791 pips, 1980’s = 14,921, 1990’s = 9090, 1999 – 2010 = 12,290, 2010 – 2016 = 4850. We lost our volatility in the 2008 crisis.

Brian Twomey Inside the Currency Market, btwomey.com