An incredible statement by Jerome Powell last week. It appears that the Head of the Fed Doesn’t Understand Inflation!  in October 2020 I hosted a webinar where I explained the looming problem of inflation. How the money printing around the world, but especially the Federal Reserve’s actions would likely cause major problems. I have repeated the theme often since.

In the fall of 2021 Powell and Yellen changed their tune that “inflation wouldn’t last,” but that it would drop by Christmas. Whoops, wrong yet again.

Then in January of this year, I posted an article “Lions led by Donkeys” where I talked about the nonsense that the Fed, Powell especially, were continuing to spout about inflation.

I said then:

Most of the following is concerning the USA mainly because of yet more BS this week from Powell and Yellen. It could just as easily be referring to the UK, Europe or any other country.

Also, it is not politically biased. I have no respect for any current financial leader nor those in the last 10 years. Yellen & Powell for example have served both Democrat & Republican masters.

Both are highly educated and have been involved in high finance for many decades so they are not stupid, but they are masters of playing the game.

Head of the Fed Doesn’t Understand Inflation!

Powells Inflation nonsense:

Last year Federal Reserve chair Powell said in late August that “inflation is only transitory.” and of real importance “tightening monetary policy could be a “particularly harmful” mistake”.*

By September he spoke about it “perhaps lasting a little longer before dropping by the year’s end.” By November he dropped the word transitory in this exchange:

“How long does inflation have to run above your target before the Fed decides, maybe it’s not so transitory?” Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) asked Powell, who appeared alongside Treasury Secretary Janet Yellen.

Powell explained that while the word has “different meanings to different people,” the Federal Reserve “tend to use it to mean that it won’t leave a permanent mark in the form of higher inflation.

“I think it’s — it’s probably a good time to retire that word and try to explain more clearly what we mean,” Powell added.

Duh, so it wasn’t that he was saying it wouldn’t be transitory (he WAS) but it’s because people didn’t understand the word!

You really think they can’t keep making this stuff up!

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Last week he moved his comments to a whole new level of insanity that I find hard to believe. I actually thought that the video had been doctored, but no. Jerome Powell the head of the Federal Reserve, the reserve currency of the world, had this to say ”

“We now understand better how little we understand about inflation,” As the interviewer commented, “that’s not very reassuring”!

Powell went on to say that “This was unpredicted!!! What the…. x^%$_ I never heard such nonsense in my lifetime.

I shared the following in my Twitter Feed: https://twitter.com/marcwalton

Here is your great leader..

Head of the Fed Doesn’t Understand Inflation!

He should have watched this video of Nobel prize winner, Milton Friedman, from 40 years ago. Friedman explains that only governments cause inflation due to the “printing presses in the basement”

I implore you to understand what is really going on around the world. To look behind the news. To listen to other opinions. Do not just blindly follow what you are being told. I talk about this most weeks in the live training sessions. I will cover it again this Tuesday.

Understand how your government and central bankers lie, manipulate and cheat you. In 2020 some senators & in 2021 Fed members were caught “insider trading” as a result of information they had about the Covid crisis before it was released to the general public. No charges were brought and the investigation was closed.

https://en.wikipedia.org/wiki/2020_congressional_insider_trading_scandal

Federal Reserves Trading Scandal

I am not having a go at just the USA, as I am sure that similar events will have happened around the globe. However, Powell’s comments were so ridiculous I focused there.

Head of the Fed Doesn't Understand Inflation!

On Friday the US manufacturing PMI came out positive so the stock market rebounded.

I suspect it is just a “dead cat” bounce.

When you dig deeper into the figures you realise as ever, that they have been twisted to suit the Feds narrative.

Do not be surprised if markets continue to drop next week

Anyway its Independence Day in the USA on Monday when Americans celebrate getting rid of the pesky Brits all those years ago 🙂

Enjoy your day off and for everyone, it’s best not to trade on Monday as liquidity will be way down.

The Forex Week Ahead

Its a short one for me and I recommend you follow my lead. Monday is most likely to be slow due to the absence of American traders. Occasionally it results in crazy spikes, but more often than not it is like watching paint dry.

Then on Friday, it’s NFP which we never trade as its forex at its silliest, so that leaves only 3 days. Having said that I made my target once again last week, just from a handful of trades which I shared with you in advance. You can find the results here:

Trade updates+200 pips

Ashley also had a good 80 pip win on the Gbp/$ that he shared in advance with you in the forum. You can catch his short video explanation here:  https://twitter.com/marcwalton

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The live training session: Here is a link to register for this week’s live training session. It takes place on Tuesday 5th July at 11.00am London time (BST/GMT+1)

https://us02web.zoom.us/webinar/register/WN_xS9sckF4ThCBoyHezG1uaA

Then we can have a more detailed, up-to-the-minute look at what’s happening and potential trades for the rest of the week.

MAJORS

Remember I am looking for “A” grade trades from daily charts that I can place and then just walk away.

EUR/USD: Bias is only to short, but it is miles away from my A grade short. You can watch the 1.0600 on the 4 HR.

USD/CHF: Worked last week for 100+ pips & I have a small balance still running I want to only long this pair, 0.9450 is the main area for me. I will split it in half once more as per Friday’s video. 2nd entry 0.9510

GBP/USD: I only want to short. 1.26340 was the sweet spot, but Ashley did better last week on shorter time frames, look there.

AUD/USD: It has done an M2 breakout. I now need a pullback to 0.71600 region for a short. I will also watch 0.7000 intraday, but not a forward order. Also big news on Tuesday.

USD/JPY: Not for me. Nowhere for stops long nor short

USD/CAD: Worked last week for 100+ pips It is currently bouncing between 1.2850 and 1.2950. I will long again. I might split into 2: 1.2800 and 1.2850 I will update you on Tuesday

NZD/USD: Shorting 0.6700

CROSSES look more interesting. Beware as a lot are correlated

NZD/CHF: 0.6280 to short it.

EUR/GBP:  I will look to long at 0.8520. If it moves higher I need a weekly candle close to long there. I explained that last week. Hopefully, it kept you out of a loser. See the video

EURNZD: Interesting to long, I will probably split in half: 1.6570 &1.6610

EUR/AUD: Longing 1.4850 correlated with Euro/Nzd

AUD/NZD: 1.0840 for a long.

AUD/CAD: SHort 0.9160

AUD/YEN: only Yen I will watch, possible B grade long at 92.30

As always, remember correlation!

M3 -Shorter timeframes.

I do my analysis on daily and weekly charts first and make a note of the MAJOR areas of support and resistance.

New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.

We are NOT a “tipping service” our aim is to teach you how to trade for yourself.

Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen):

Regards

Marc