we will look at

GBPRECOVERYA NA LY S I S

JANUARY - MARCH 2017

A REVOLU TIONARY MOVEMENT NEEDS A REVOLUTIONARY FINANCIAL SYSTEM. OBSOLETE SYSTEMS WILL BE REPLACED.

TRADER MAGAZINE

ever ything

DIVERGINGCENTRAL BANKSUSD IMPACT

ELLIOTT WAVE2017 PROSPECTS

TRIPLE SCREENTRADING METHOD

STAYING OUT OF BAD TRADES

FXCONTENTs

CENTRAL BANK POLICY DIVERGENCE THE IMPACT OF THE DOLLAR

Divergence supports the Dollar. Opportunities in USD trades against emerging market and commodity currencies

33

Using Elliott Wave to Uncover the Currency Market’s Best Opportunities for 2017

2007 EDITOR’S NOTE

CURRENCY WATCH

39 GBP Watch: Sterling’s recovery phase. How much further to go?

FUNDAMENTAL ANALYSIS

23 What to expect from the central banks in 2017: an overview of central banks priorities to protect traders from periods of volatility

TECHNICAL ANALYSIS

52 “Three Screens Are Better Than One” How to use Dr. Alexander Elder’s Triple Screen Trading Method

27 US Dollar Watch: The Year Ahead, Final Leg of the Dollar Bull Market

57 A technical preview of the major currency pairs for 2017: EUR/USD,

GBP/USD, USD/JPY

MACROECONOMICS

11 Outlook 2017: Politics to Eclipse Economics

64 The Italian Banking Crisis: No Free Lunch. Or Is There? Is the magic bullet just being ignored?

TRADING SYSTEMS 43 Currency pairs: A look through the fractal dimension

TRADING PSYCHGOLOGY

60 How To Stay Out Of Bad Trades: simple techniques to avoid entering bad trades and become more consistent

COMMODITIES

62 $60 OR $50 OIL?:

Oil at $60 or $50 depends on OPEC, Trump and shale strength in 2017

TECHNICAL REPORTS

68 Currency Index:NZD-G10 index, long-termCAD-G10 index, long-term

69 Trends and Targets:USD Majors, Major CrossesEmerging & Asian MarketsUSD/JPY, EUR/SEK, USD/ZAR, EUR/NZD

73 CONFERENCES & SEMINARS

INTERNATIONAL DATA

74 FX Spot Monitor75 Central Bank Rates76 Economic Data - FX Poll77 Markets View

78 ECONOMIC CALENDAR

MAJOR CURRENCIES 47“WE’LL LOOK AT EVERYTHING”

More Thoughts on Trump’s $1 Trillion Infrastructure Plan

FX TRADER MAGAZINE October - December 2016 3

“We’ll Look at Everything”: More Thoughts on Trump’s $1 Trillion Infrastructure Plan

Trump’s plan implies that obsolete systems will go and will be replaced

Funding the plan through the bond markets merely recirculates existing money

A revolutionary movement needs a revolutionary financial system

To stimulate the economy, create new jobs and generate new GDP requires an injection of new money. Borrowing from the bond markets or off-balance-sheet in public/private partnerships won’t do it. If Congress won’t issue money directly, it should borrow from banks, which create money on their books when they make loans.

by Ellen Brown

FXMONETARY POLICIES

FX TRADER MAGAZINE January - March 2017 47

MONETARY POLICIESFX

The Trump agenda, it seems, is not set in stone. The president-elect has a range of advisors with as many ideas. Steven Mnuchin, his nominee for Treasury Secretary, said in November that “we’ll take a look at everything,” even the possibility of extending the maturity of the federal debt with 50-year or 100-year bonds to take advantage of unusually low interest rates.

Steve Bannon, appointed chief White House strategist, seems to be envisioning Roosevelt-style experimentation with whatever works. “We’re just going to throw it up against the wall and see if it sticks,” he said in an interview posted by Michael Wolff on November 18th:

Like [Andrew] Jackson’s populism, we’re going to build an entirely new political movement. It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Shipyards, ironworks, get them all jacked up. . . . It will be as exciting as the 1930s, greater than the

Reagan revolution — conservatives, plus populists, in an economic nationalist movement.

That sounds promising. Obsolete systems will go and will be replaced. But

how to ensure that the replacements are an improvement?

Another Look at the Trillion Dollar Infrastructure Plan

Current proposals for funding Trump’s $1 trillion infrastructure project have been heavily criticized. In October, his economic advisors Wilbur Ross and Peter Navarro proposed funding the plan with tax credits to private investors, who would then borrow from the

bond markets. An infrastructure bank tapping into private investment has also been suggested. Both rely on public/private partnerships. Michelle Chen, writing in The Nation on December 2, calls the plan “a full on privatization

assault.”

A February 2015 report by Public Services I n t e r n a t i o n a l titled “Why Pu b l i c - Pr i va t e P a r t n e r s h i p s Don’t Work” maintains that p u b l i c / p r i vat e partnerships are just another form of government b o r r o w i n g , moved off-b a l a n c e - s h e e t to evade debt ceilings and deficit fears. The report concludes:

[ E ] x p e r i e n c e over the last

15 years shows that PPPs are an expensive and inefficient way of financing infrastructure and diverting government spending away from other public services. They conceal public borrowing, while providing long-term state guarantees for profits to private companies.

PPPs also won’t work to fund the sorts of unprofitable but necessary infrastructure projects that Trump’s plan is supposed to include. As

Wilbur Ross and Peter Navarro proposed funding the plan with tax credits to private investors, who would then borrow from the

bond markets

48 FX TRADER MAGAZINE January - March 2017

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