Anybody have any thoughts on this ? The major bond insurers are basically broke.The ECB just put 500 billion into the system in a attempt to shore up the financial system.The American Fed is is printing money 20 billion dollars at a time.This is like trying to help a drunk by giving him a a keg of whiskey. Im curious about the danger to the forex. How solvent are the big forex brokers?
Any opportunities here?
in my opinion thats a tough question. let me nkow when ya find the answer.
I believe that it could spell trouble trouble and it could make it double, just look at the historical market chaos that occurred in the lest century such as the Asian Financial Crisis or any market crash… if things keep on rolling along without the Fed “stimulating” the market in all the right places, the investors will take their money somewhere else and the speculators will go short which would lead more speculators going short and on and on which could lead to a market crash, no one can control the fx market so anything could happen… the fed would have to rise rates to get investors to start investing in the US markets once again but with the current conditions I dont think it will happen but expect the unexpected but on the other hand it probably will not happen anyway b/c not only will the US will intervene but also the ECB and other central banks if it would happen by injecting funds… do you have any idea what will happen to their markets if our crashes… it will be chaos and just as the saying goes “If America sneezes Europe catches a cold”
based on my opinion*
Hi pipraider,
The problem is that the Fed can only raise rates or lower them, if not done in perfect timing and proportion the first will cause another Great Depression the second, hyperinflation equal to Germany’s in the 20’s . Either way the volatility in the forex would make it very risky to make a trade.
The big forex brokers are plenty solvent. Oanda, for example, recently received a $100 mln investment. Aside from that, there has been a move all year to get the brokers up to higher capital levels. If you have a good broker, I wouldn’t worry about it at all.
As for the Fed for anyone else printing money, you seem to be failing to see the other side of the equation where the money is coming back out of the system. All these actions (and the ones by the ECB) have specific terms - 2 weeks, 30 days, etc. That means the money is coming right back out on the other side of the 1st. It’s not permanent.