«Market Leader» - news and previews making you rich.

Sunday, 26 May 21:04 (GMT -05:00)


Market Leader Free Newsletter
Your Name:
Your Email:

Business And Politics News

Will There Be Another Major Crisis? What Awaits The US Dollar?


 

Since the latest global crisis in 2008, numerous economists, financiers and other experts and analysts have been pondering on whether there will be another major crisis. Indeed, there are several reasons to speak about the possibility of a double-dip recession (or the 2nd wave of the crisis, as some experts call it):
 
·         The global economic recovery has been too prolonged and unstable.
·         The Chinese economy is overheated.
·         The Japanese economy has difficulty recovering from last year’s natural disasters and nuclear meltdown.
·         The eurozone crisis hasn’t been resolved so far.
 
These days, nobody denies the possibility of another major crisis. How real is the possibility? When may it happen? Is the world ready for it?

 

 

 

 
2nd Wave: Analysts Are Divided
 
We still remember the consequences of the latest global economic crisis, which caused severe damage to the global economy and financial system. Greece has been on the verge of default ever since. In May 2010, Greece received a €110 loan. Most experts though the money would be enough to fill the gap as the Greek economy accounted only for some 2.5% of the eurozone GDP. However, several months later, Ireland and Portugal addressed the EU authorities for financial help as well. Some experts started calling the risky eurozone economies PIGS (Portugal , Ireland, Greece, Spain ). However, when PIGS turned into PIIGS (Italy, the eurozone’s 3rd largest economy, joined the company) everyone started anticipating another major crisis.
 
According to Nord FX, these days, nobody treats the Greek crisis as a minor or insignificant one anymore. Everybody understands that Greece can undermine the eurozone’s stability and even destroy it together with its common currency.
 
Over the last 12 months, numerous economists and financial experts have been giving their forecast for another major crisis:
 
Nouriel Roubini. In early 2011, Mr. Roubini expected another crisis to start from the Chinese economic slowdown. In late summer 2011, he changed his mind, this time giving the US and Europe credit for another major crisis. He used to name 2013 as the time when the 2nd wave will break out. Later, he changed it for mid-late 2012.
 
Alexei Kudrin, ex-Minister of Finance of Russia, said in Dec 2011 that the financial crisis had already started and  the world would feel it in 2012.
 
Hundreds of other forecasts were similar to the abovementioned theses…
 
 
 
Expert Opinion:
 
According to Masterforex-V Academy (Europe’s Best Forex Training Project 2009-2012), unfortunately, more and more negative factors contribute to the possibility of another major crisis:
 
USA. The pace of economic recovery is too slow. The US Dollar is volatile. The US authorities do not anticipate a complete recovery within a few years – the Federal Reserve is not going to raise the key interest rate (which is around 0%) till mid 2014. Moreover, the Federal Reserve may well start emitting more dollars in order to achieve minor, temporary success in advance of November’s presidential elections.
 
 
The following factors contribute to the US Dollar and economic recovery:
 
·         The situation in the US housing market seems to be improving. April’s new home sales report showed an increase. Despite the fact that the housing market is still weak, it has probably reached the bottom and is expected to contribute to the US economic growth.

 

продажа домов

 

 

·         Consumer sentiment improved in May. Most likely, this happened due to lower gasoline prices and stronger dollar. The CCI increased from 76.4 in April up to 79.3 in May.
 
·         As we are getting closer to the US presidential elections, the US authorities are expected to do their best to stimulate the US economy and to strengthen the national currency.
 
 
Systemic risks:
 
·         Greece may leave the eurozone. This scenario is getting more probable.
·         Operation Twist is about to be over. However, the US economy needs further stimulation. Otherwise, another stock market collapse may take place along with dollar weakness.
·         China’s economic growth is slowing down.
 
Eurozone. The so-called PIIGS (Portugal , Ireland, Italy, Greece, Spain ), which represent one third of the eurozone, are on the verge of default. The crisis may escalate in early July if the Greeks fail to resolve the political crisis after the parliamentary elections.
Japan. The world’s 3rd largest economy has been trying to recover from the devastating earthquakes and tsunamis for over a year. Its public debt keeps growing. Fitch has already cut its credit rating. Obviously, Japan will be of no help to the global economy in the coming years.
 
China. The world’s 2nd largest economy keeps fighting against multiple problems like fast-growing inflation, housing market bubble, flight of foreign capital, declining export etc. Moreover, the Chinese like to sit and wait.
 

 

Китай

 

 
Emerging economies. Most experts hope that the high pace of economic growth seen in the BRICS economies will make up for the stagnation in the developed economies. However, the forecasts do not sound reassuring.
 
 
US Dollar Prospects:
According to Masterforex-V Academy, the US Dollar has negative correlation with major US stock indexes (Dow Jones, SP&500, Nasdaq Composite, Nasdaq 100, FTSE 100, DAX etc.), as well as with stocks, commodities (gold, oil etc.)
 
Currency strategists at Masterforex-V Academy start analyzing the market with the mid-scale chart of the USD index, which helps to determine the direction of the following trend:
The chart below shows that in order to resume the rally, the price will have to break above the red sloping axis 1.7018/1.6990. A trend reversal will become possible if the price breaks and consolidates below the blue sloping axis:
 

 

курс американского доллара

 

 
Market Leader and Masterforex-V Academy would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:
 
In your opinion, will there be another major crisis?

 

 

 

You are free to discuss this article here:   forum for traders and investors

 

Add to blog
Got a question? – Ask it here »
 

Tips For Investors: Does Russia Have a Bright Future in the WTO?

 

It’s been almost 12 months since Russia joined the World Trade Organization. This means that we have got an opportunity to make first intermediary conclusions. Still, this is not a easy task since the results are rather controversial. On top of that, the Russian community is still divided over Russia’s decision to join the WTO.
 
Some of them consider July 10th 2012 (the day when the State Duma approved Russia’s WTO membership) the day of shame and national tragedy, the proof of national helplessness. They urge the government to exit the WTO. Others think that Russia has finally got an opportunity to integrate into the global economy, which is definitely a huge benefit for the Russian economy.
 
Let’s have a closer look at the situation…
Publication date: 23 May 06:40 PM

The National Interest: Romney Says Russia Is USA’s №1 Foe. Is I t Rue?

 

Mitt Romney, a senator and the Republican Party's nominee for President of the United States in the 2012 election, seems to have made himself known once again. This all revolves around his famous statement that “Russia is America's 'number one geopolitical foe”.
 
Publication date: 21 May 04:11 PM

FBS: FX Bazooka – Analytical Portal of New Generation

 

As the Internet is brimming with financial information, it is generally hard for a trader to focus on its continuous stream. Many get lost in the abundance of offered possibilities and often make mistakes. It is a paradox, though truth, that the greater amount of information provokes hasty actions.
Publication date: 21 May 01:59 AM

Schools of Managers: Why Brokers Need Successful Managing Traders

These days many traders show rather average results at forex market. According to statistical data, only 5% reach real success, thus gaining regular profit. How are these 5% different from others?

First of all, they have the skill of taking wise trading decisions, based not on emotions, but on thorough analysis of all nuances, as well as all technical and fundamental results for present and future perspective. They are also characterized by systems of effective money and risk management, skill of waiting or acting when such is required by trading system.

Publication date: 20 May 10:21 AM

The Washington Post On European Crisis and Euro

 

Over the last few years, the word collocation “European crisis” has turned into a set expression. It’s been almost 5 years since it began. Europe seems to have suffered most of all form the global crisis. 2 years ago a new wave of crisis broke out, thereby turning into a severe debt and banking crisis in the EU and the eurozone.
 
Good news are scanty while bad news keep coming from Europe almost every day. Yet, the world cannot ignore it because Europe accounts for nearly 20% of the entire global economy. Even though everyone seems to get used to unexpected (sometimes shocking) and controversial news from the area, they are still worried about the destiny of the Old World? A complete downfall or a renaissance?
 
Publication date: 13 May 12:48 PM

Trust In EU Declines. Will Euro Collapse?

 

The latest opinion polls conducted in the EU show that more and more European citizens show distrust in the EU and the eurozone. The biggest decline was seen in the EU’s 6 biggest countries. In particular, in Spain , the distrust increased up to 72%. For comparison sake, it used to be just 23% 5 years ago.
Publication date: 02 May 11:43 AM

ForexContest 2013 – New Contest, New Opportunities

 

The purpose of fighting is to win, as the well-known saying goes. At Forex market traders, no matter whether they want it or not, have to fight not only for profits, but also... between themselves. In order to succeed, one has to manage his emotions, resisting panic, act on the basis of competent full-scale analysis of current and perspective situations, know and understand own trading strategies, based on numerous technical and fundamental components.

Publication date: 26 April 09:49 AM

Tusar Forex: Open an Account and Get 8 Dollars!

Today anyone may earn money at international currency market Forex, provided that a trader has the necessary knowledge and, what is more important, has good understanding it. As far as this financial market is the largest according to daily money turnover (several trillion dollars), as well as one of the most progressive ones (there regularly appear innovative technologies), opportunities of successful work at it are available even for people that do not possess a considerable capital.

Publication date: 18 April 10:22 AM

USA vs China: Can H7N9 Virus Be Biosychological Weapon?

 

China is reporting about another epidemic of the so-called bird flu (also known as virus H7N9). It has already suspended the domestic poultry trade. Numerous markets are closed in Shanghai, Beijing and other big cities. Chinese bloggers keep posting shocking footage showing dead birds.

At the same time, top-ranking Chinese military officials put the blame on the USA. They say this is some kind of a secret biotechnological weapon developed and used by the Americans.


Russia takes urgent steps to prevent the epidemic from spreading over its territory. Russia’s chief medical officer urges people to abstain from visiting the neighboring Asian country. There are temporary limitations for those who arrive from China. Russia may eventually close the border with China until the situation stabilizes.
 
What is really happening in China? How dangerous is the current epidemic? Can the USA be involved?
Let’s try to answer these questions together…
Publication date: 17 April 07:08 AM

Will Global Shale Boom Affect Russia’s Oil Industry By Dropping Oil Prices?

 

The USA seems to threatening Russia not only with a shale revolution but also with a shale war. The North-American shale boom seen in the region over the last few years, has been treated as the end of Russia’s oil and gas industry. Everything started from shale gas, which allowed the USA to turn from an NG importer into a net exporter of this energy carrier.  
 
Yet, US officials do not conceal the fact that they are going to use this trump card to free Europe from the dependence on Russian energy carriers.  Now American observers and analysts are discussing the gloomy prospects of Russia’s export of energy carriers caused mainly by the shale boom in the USA and worldwide.
What is really happening inside the US shale industry? Is Russia’s export of energy carriers to Europe doomed? Let’s have a closer look at the situation.
Publication date: 16 April 02:58 PM