A “Golden Age” for Currency Traders Has Begun It’s Friday… That means it’s time for your mailbag edition of The Daily Cut. It’s where we answer the questions you’ve been sending to Teeka Tiwari, Jeff Brown, Nomi Prins, and the rest of the Legacy Research team. So, if you have a question for any of our experts, write us at feedback@legacyresearch.com. And I’ll do my best to get you an answer. Today we’ll hear from Jeff on the dangers of central bank digital currencies – or CBDCs. These are digital-only currencies central banks will use to replace the physical cash in your wallet. In November, the Fed launched a pilot program in partnership with nine major U.S. banks for a U.S. dollar CBDC. And it’s making some readers nervous. But first, we’re kicking off today with a question for currency trading expert and friend of Legacy, Imre Gams. He’s has been working alongside master trader Jeff Clark since October 2021. And last October they launched a new advisory. It’s called Currency Trader. And their mission is to capture the gains on offer in what they believe is a new “golden age” of currency trading. Currency traders don’t care whether stocks are in a bear market… or about high inflation… or about a looming recession. They profit, instead, when one currency goes up versus another. And thanks to Fed rate hikes… and hikes from central banks around the world… there are bigger opportunities now to profit from currency volatility than we’ve seen in more than a decade. By trading these swings, Imre has scored one of the best trading streaks I’ve seen in my time at Legacy Research. Since he started the beta trial phase of Currency Trader last July, 19 of his 20 trades have been winners. So, it’s been a huge hit with subscribers… Recommended Link | Biden Just Signed Death Warrant On Your Freedom If Biden’s Executive Order 14067 comes to pass, a former advisor to the CIA and Pentagon is predicting legal government surveillance of all US citizens; total control over your bank accounts and purchases; and indefinite Democrat control past 2024. He says Covid was a trial run for how to control a population. Dems will use their “pandemic playbook” to silence any dissent. |
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| Reader comment: Hola, Imre. Happy New Year! I appreciate all the knowledge and wisdom you share with our group. It’s super helpful and inspiring. I have a question concerning which side of the currency pair establishes the up- or down-action on the chart. In other words, if there’s good news about the GBP, such as "GBP soars due to..." will the chart go up in the GBP/USD pair, or down? Or if JPY is falling due to some news, will the chart fall or rise in the USD/JPY pair? – Robin R. Imre’s response: Hi, Robin. This is a great question. I’ll do my best to simplify it. As you mentioned, we always trade currencies in pairs. Let’s use the GBP/USD pair as an example. The first listed currency of a currency pair is called the “base” currency. The second currency is called the “quote” currency. A currency pair indicates how much of the quote currency is needed to buy one unit of the base currency. GBP/USD measures how many dollars it takes to buy one British pound. If this pair goes up, the British pound is getting stronger versus the dollar. If it goes down, it’s weakening versus the dollar. A currency pair is like tug of war. Each currency in the pair is on opposite ends of the rope. A smart currency trader will be there to join in when one side or the other has the upper hand. And they’ll be out of their position before the game starts going the other way. Let’s say that, at its next meeting, the Fed announces, “We’re going to pause interest rate hikes.” You’d think that would lead to a weaker dollar, as the extra yield you’re getting over other currencies will come down. But other central banks could react by backing off on planned rate hikes of their own. And when all the banks pause on rate hikes, currency strength tends to favor the dollar. This makes currencies exciting to trade. You always measure them relative to other currencies. This increases the possibilities for volatility in either direction. Another Imre subscriber wants to know how a CBDC could affect currency markets… The #1 stock for 2023 Reader comment: Hello, Imre. I’m a member of Currency Trader, and I have a huge concern. The Inflation Reduction Act that Biden signed into law last August includes the rollout of a U.S. CBDC this year. I would think this will have dire consequences for the currency trading market. – Patricia M. Imre’s response: Hi, Patricia. Thanks for writing in. I understand your concern. I don’t know when CBDCs will come into effect or what their rollout will look like. And there are still some unknowns. So, it’s impossible to say how it will impact currency markets. I don’t feel confident telling you it will have no impact. I’m sure there will be changes. And some of them may not be good. But countries’ currencies will still be moving against each other… and giving us the opportunity to profit… regardless of whether they’re digital or not. Recommended Link | Millionaire Trader: “Tech Stocks Are Overrated, Do THIS, Instead” Hi folks, Jeff Clark here… I’ve joined the ranks of the top 1% of wealthy Americans… by IGNORING 99% of the entire stock market. Take a look at this… Among 6,000 different stocks on the market to choose from… Hides ONE very special stock. I call it, “The One Stock Retirement” because… I’ve used it for years (through ANY market condition) closing gains like 373%, and more – time and time again. Trading this ONE stock over and over again is changing the lives of everyday folks across the world – from school teachers to doctors. And you don’t need trading experience… and you can get started with $100 or less! |
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Imre’s readers aren’t the only ones worried about the impact a CBDC could have on their wealth. Colleague Jeff Brown has similar worries about how much more control over the financial system a CBDC would give the government. Here’s a question about FedCoin Jeff got from a reader of his tech investing e-letter, The Bleeding Edge… Reader question: I’ve had a few thoughts about the FedCoin and wondered if you could comment on them in your mailbag. It seems to me that most people just don’t grasp the similarity between Sam Bankman-Fried’s FTX cryptocurrency exchange and FedCoin. They’re both highly centralized and not at all independent. But it’s FedCoin we should be more concerned about. A government, not an individual, is behind FedCoin. – Debbie F. Jeff’s response: Hi, Debbie. I get where you’re coming from. It’s not an apples-to-apples comparison. FTX was a centralized cryptocurrency exchange that went belly-up after crypto news site Coinbase exposed a massive hole on its balance sheet. This led to the discovery that its founder, Sam Bankman-Fried – or SBF, as he’s called – was funneling customer funds into his crypto trading firm, Alameda Research. FedCoin is a fully digital cryptocurrency version of the U.S. dollar where the Fed would have centralized control over the tokens. In both cases, control of your crypto involves a middleman… giving you less control over your coins. And while FTX and CBDCs aren’t quite the same… I agree FedCoin has frighting implications. A CBDC is digital-only version of a national currency. So, a digital version of the dollar, the pound, the yen, and so on. And unlike a decentralized cryptocurrency such as bitcoin, as I said before, central banks have centralized control over them. Central bankers like the idea of CBDCs because they’d be programmable money. Up until recently, the Fed was trying to increase the level of inflation. Normally, it does this by lowering interest rates to encourage borrowing. But rate changes take time to work through the economy. And it’s not even clear if they have the desired effect. But imagine an economy that runs on CBDCs. The Fed could program it to lose 2% a year in value every year. That’s the equivalent of a 2% inflation rate. And with a CBDC, the IRS could track and tax every transaction we make. The Fed could then freeze the digital wallets of individual CNBC holders the government has a problem with. Maybe we’re creating too large a carbon footprint. Then the Fed could freeze transactions that result in a larger carbon footprint. So, maybe you can’t spend your FedCoins to fill up your pickup truck. Or you’re limited to how much gasoline you can buy. Or you can’t buy more meat for the month because of meat production’s impact on climate change. That level of control would absolutely be possible with a CBDC. That’s all we have time for this week. Remember to write in your comments and questions to feedback@legacyresearch.com. My team and I read everything you send. Have a great weekend. Regards, Chris Lowe Editor, The Daily Cut Like what you’re reading? Send your thoughts to feedback@legacyresearch.com. IN CASE YOU MISSED IT… Thousands a month ain’t bad… “What if I told you that you could make $3,173 a month… or more based on your investment size… even in this crazy market? I’m not saying it’s possible… I’m telling you that my readers already have access to this kind of income. Now, you can acquire it as well. If you’re like most people, you’re concerned that the market will get worse. And if that’s the case, you’ll want to obtain my strategy and research right now. My service is designed to help you sleep well at night in all market conditions. I’ll explain everything right here – including how to access my research.” – Brad Thomas Click for details here. |
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