Intervention

Intervention. Now don't let that big word scare you. The talking heads on TV have been discussing it all week because the major banks of the world are going to "prop up" the Euro.

What the heck is the "euro"? This is a currency just like the British Pound, the French Franc and the German Duetschmark, but it supercedes those currencies and is supposed to ultimately replace them as the money of all the European countries. It is another layer on top of the currency of each country. It was introduced in January 1999 and has been sinking ever since.

It was supposed to stabilize the European currencies, but all the underlying currencies have been going down in relation to the US Dollar. When the tide goes out the boat goes down. The tide is the various currencies and the boat is the Euro.

Everything must be converted to Euros. Oil is world-priced in U.S. dollars so it takes many more Euros now than it did early this year. This principle applies to everything that is bought abroad by European countries. Why do we care? Politics.

Let's make this simple. Take your neighborhood and use the housing market as an example. Ever had a "soft" market for home values in your area? Of course you have. Everyone has. So the local real estate boards decide the way to keep prices from going down is to buy houses as they come on the market at the current prices even though the real values continue to slip lower. What happens? Immediately prices strengthen, but slowly they start to weaken again and finally the real estate boards run out of money and suddenly when the artificial buying ceases the market collapses to a lower price than where they started their "intervention". Brilliant strategy!

As I have said in my book an economist is the last person you want to consult about what is going to happen in the real market. Most of them don't know the price of a loaf of bread and quart of milk. They will quote you econometric formulas until they are blue in the face and no two of them will agree on anything.

Until the underlying economies of the European countries strengthen with good sound economic principles, primarily laissez-faire, you will not see a long-term positive effect on the Euro.

If you aren't confused you by now, don't worry about it because none of us peons can get these geniuses to use good common sense.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

[email protected]; 1-888-345-7870

In The News:


What the SEC Really Thinks About Mutual Funds!

Let's go into the details of why non-indexed mutual funds... Read More

3 Components Needed for Beating the Market

Time to look back2004 is over, now we are in... Read More

Hold Em and Fold Em

When most analysts, financial planners, fund specialists and investors try... Read More

The Secret Method to Selecting a Winning Trading System

Every successful trader has a winning system. There are of... Read More

What is a Mutual Fund?

Ever wondered what is a mutual fund? A mutual fund... Read More

Losses, not Profits, will Stop You from Trading in the Market

Should the market turn against you, it is important that... Read More

How To Pick A Mutual Fund

Mutual funds by definition are a mixed bag of stocks,... Read More

Long-Term Investment In Todays Market?

The stock market is very unstable at this time going... Read More

Long Term Financial Vehicles

Investing in long-term financial vehicles give you the most gains... Read More

Hot Stock Investing ... How to Pick Hot Stocks with Momentum Stock Trading

Profitable day traders recognize that momentum trading is among the... Read More

Maximizing a Stock Market Investment

Maximizing a stock market investmentThere are several factors an investor... Read More

Price to Earnings Ratio - P/E

After finding the price of a particular stock, usually the... Read More

The Secret Art of Backtesting

If you have not back tested your trading system, you... Read More

Economists #2

Economists know more about how the fragments of society work... Read More

Time Out

Are you paying any attention to your retirement savings? Do... Read More

What is a Trading Plan ? and Why You Need One?

How do you make money without picking tops and bottoms?I... Read More

Complacency

During the month of January the Dow Jones Industrial Average,... Read More

How We Eluded The Bear Of 2000

The date October 13, 2000 will forever be embedded in... Read More

Emotional Maturity

If you are going to be a winner in the... Read More

The Cub; II

We keep hearing about this bear market and that the... Read More

Market Timing?

The recent criminal fiasco in the mutual fund industry is... Read More

Investment Discipline

One of the great "secrets" of successful people is discipline... Read More

The Seven Mistakes All Novice Traders Make and How to Correct Them

We learnt the following the hard way! If any of... Read More

Different Types of Mutual Funds

This is a guide to the different types of mutual... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More