Tackle Today: It’s all the fugazi Part I – Hyperinflation
September 18, 2018
≈ It’s a whazy. It’s a woozie. ≈
– “[…] Nobody knows if the stock is going to go up, down, sideways or in circles. […] It’s all the fugazi. You know what a fugazi is?”
– “Fugayzi, it’s a fake.”
– “Fugayzi, fugazi. It’s a whazy. It’s a woozie. It’s fairy dust. It doesn’t exist. It’s never landed. It is no matter. It’s not on the elemental chart. It’s not real.”
—The Wolf of Wall Street (2013)—
Fugazi is what we traders hold in our brokerage accounts. Digits. Nothing more than that. Fairy dust.
If you live in a country like today’s Venezuela, or in Zimbabwe during 2008, or in Brazil during the late 1980s/early 1990s, or in Germany during the late 1910s/early 1920s, or in Hungary after the WWII as well as in many other countries during the last century, you’d have had your skin in a game called Hyperinflation:
– Venezuela annual inflation rate in 2018: 1,000,000% by the end of the year.
– Zimbabwe monthly inflation rate on mid-November 2008: 79,600,000,000%
– Germany monthly inflation rate in October 1923: 29,500%
– Brazil annual inflation rate in 1990: 30,377% (By the way, Brazil changed its currency 5 times in less than 10 years. Those were the days, man…)
– Hungary rate of inflation on July 1946: 41.9 quadrillion percent.
Governments love to print money and throw liquidity into the system, for whatever reasons. So, on one day, you have money and, while trading, you’re making plans to leave a legacy to your children, to retire for good or to reach your financial independence. The next day, you can’t even buy a comic book with your investments.
Your money has no real value.
Stay tuned, traders. Tomorrow, we’ll be releasing the second part of this series. We want you to move from the fugazi to real value.
Chart of the Day
GOLD FUTURES
This chart looks ugly, at least for those who are long Gold with the clear purpose of getting rich. But for those who are holding the metal as a hedge against fiat currency and central bank craziness, or, if you’re trading overseas and you are hedging against political instability and a weak/exotic currency, it’s just another day in the office. Remember: in the Wise Trader’s Dictionary, Gold is a synonym for Value.
Video of the Day
What is a Trendline
A trendline is a line drawn from pivot to pivot and extends to the right, typically drawn under swing pivot lows or over swing pivot highs or to show the prevailing direction of the price trend.
Today’s Lineup
TALES OF A TECHNICIAN
The Anatomy of a Drawdown
If you want to win, you have to learn to lose. If you don’t, financial peril awaits. I want to shed light on losses with a focus on how to think about drawdowns in trading systems. The term “drawdown” is simply trader-speak for a loss or series of losses.
Environmental Hedging
Trading and Gardening: the exact same thing
This week I am working to make the garden grow, while harvesting some kales, basil and a few other herbs. And watched my tomatoes grow. I also had some cucumbers and squash growing nicely, but the storm ruined them…I’ll talk more about it later in the blog. I am now building a nice wooden rised–bed from a kit I bought online some time ago, and soon will fill that puppy with a mix of soil and fertilizers.
Coaches Lounge 11am EST
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The Coaches Show 8:30PM EST
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Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
Christian you just made my day! Now I can relax knowing my account is just fairy dust. LOL.