The cause, effect and follow-up of gold skyrocketing
because:
The largest bank in the currency circle closed its doors due to crazy runs and huge losses, and the currency circle was wailing everywhere; at first, people thought it was just a matter of the currency circle.
Last Thursday, SVB Bank in Silicon Valley made a strange announcement that SVB Bank sold almost all of its currently available treasury bonds and securities, with a total value of up to 21 billion U.S. dollars (1.8 billion U.S. dollars in light storage losses). The bank is also seeking to raise $2.25 billion in various forms of equity financing.
The national debt has been sold, and there is only one truth, he is facing a liquidity crisis. In other words, there was no run at that time, but a few big customers wanted to cash out and sell assets in order to replenish funds, but customers with small funds did not know it. They only knew that you almost sold the bank. You can't take over by yourself.
How should I put it, when the tree falls and the monkeys scatter, and when the wall falls, everyone pushes away. Many institutions suggested that companies withdraw funds as soon as possible before the Silicon Valley Bank ran out of funds, and the run became a stampede, burying Silicon Valley Bank itself.
This accident started when the mine was planted in 2019. The Federal Reserve printed money like crazy, and Silicon Valley Bank spent a lot of deposits at extremely low interest rates. At that time, the interest rate was extremely low, only 0.25%. Whoever saves money might as well spend it. The market is full of money, and the demand for loans exceeds the demand.
Some banks began to use the extra low-interest assets to buy long-term government bonds and MBS (mortgage-backed securities) to obtain high interest rate spreads. Two years later, the Federal Reserve began to raise interest rates. The 0.25% was not enough. Depositors began to withdraw money. Affected by inflation, start-up companies had a hard time surviving. The environment was like this. Burn money!
The increase in interest rates has caused the bond investment in the hands of banks to shrink or even lose money, and depositors are getting more and more money, and Silicon Valley has no money. The incident at the beginning also happened. The objects in the currency circle are different, and we are also to protect everyone. As soon as something happened in the currency circle, the bank sold the assets, and when it was over, they couldn’t keep it at all, and the panic was magnified.
Will it be okay if the fire burns down Silicon Valley? How is it possible, except for the official bankruptcy of Silicon Valley Bank, Philadelphia, JPMorgan Chase, Bank of America, Wells Fargo and Huaqian were all affected. Treasury bonds, or mortgage-backed securities, that these banks sold aggressively flowed into the market. The banks are all in a storm, and the public can only choose government bonds. The yield of long-term government bonds will not be able to run in the short-term.
Other countries and institutions that have borrowed cheap U.S. dollars for 20 years and invested in long-term products, as long as they buy long-term products, are equivalent to helping others pay interest... This loss will naturally lead to floating losses and possible emerging Market dollar run.
The U.S. economic market has been disrupted. Did Powell think about it when he said that the economy was fine? We don't know, but when emerging markets are on the verge of collapse at any time, the safe-haven attribute of gold has been brought up again. The CPI on Tuesday is last month's data, which may not be bad, but this time it may be just a short-term support, which is short-term negative for gold. If the fire is not extinguished for a day, there will still be people fleeing to the gold market with their families in their arms.
Summarize:
Powell's hawkish speech bets on a radical 50 basis point interest rate hike, and the long-term assets purchased by banks will reduce or even lose money; start-up companies will burn a lot of money and their ability to repay their debts will be weakened; public panic will amplify.
Banks sold treasury bonds and securities aggressively to save themselves, and customers with large and small amounts of money frantically withdrew money, and the run turned into a stampede;
The credit of banks has declined, treasury bonds are favored, and the yield of short-term treasury bonds is higher than that of long-term treasury bonds, which has become an inversion;
This came and went, thunderstorms occurred, the inversion of U.S. debt deepened, and the hedging of the gold market was also stimulated.
However, the general situation is that the early stage has a great impact on the market, but the follow-up is still back on track. For example, the Federal Reserve has already started to rescue the market.
To sum up, it is impossible to cut interest rates, and there will be no interest rate cuts this year, and even want to stick to the assumption of raising interest rates. Could this farce be done by the market to force the Fed to stop raising interest rates? But in any case, before the Fed cuts interest rates, there is still a lot of monetary policy, but there is no need to bet so much for a long time.
The largest bank in the currency circle closed its doors due to crazy runs and huge losses, and the currency circle was wailing everywhere; at first, people thought it was just a matter of the currency circle.
Last Thursday, SVB Bank in Silicon Valley made a strange announcement that SVB Bank sold almost all of its currently available treasury bonds and securities, with a total value of up to 21 billion U.S. dollars (1.8 billion U.S. dollars in light storage losses). The bank is also seeking to raise $2.25 billion in various forms of equity financing.
The national debt has been sold, and there is only one truth, he is facing a liquidity crisis. In other words, there was no run at that time, but a few big customers wanted to cash out and sell assets in order to replenish funds, but customers with small funds did not know it. They only knew that you almost sold the bank. You can't take over by yourself.
How should I put it, when the tree falls and the monkeys scatter, and when the wall falls, everyone pushes away. Many institutions suggested that companies withdraw funds as soon as possible before the Silicon Valley Bank ran out of funds, and the run became a stampede, burying Silicon Valley Bank itself.
This accident started when the mine was planted in 2019. The Federal Reserve printed money like crazy, and Silicon Valley Bank spent a lot of deposits at extremely low interest rates. At that time, the interest rate was extremely low, only 0.25%. Whoever saves money might as well spend it. The market is full of money, and the demand for loans exceeds the demand.
Some banks began to use the extra low-interest assets to buy long-term government bonds and MBS (mortgage-backed securities) to obtain high interest rate spreads. Two years later, the Federal Reserve began to raise interest rates. The 0.25% was not enough. Depositors began to withdraw money. Affected by inflation, start-up companies had a hard time surviving. The environment was like this. Burn money!
The increase in interest rates has caused the bond investment in the hands of banks to shrink or even lose money, and depositors are getting more and more money, and Silicon Valley has no money. The incident at the beginning also happened. The objects in the currency circle are different, and we are also to protect everyone. As soon as something happened in the currency circle, the bank sold the assets, and when it was over, they couldn’t keep it at all, and the panic was magnified.
Will it be okay if the fire burns down Silicon Valley? How is it possible, except for the official bankruptcy of Silicon Valley Bank, Philadelphia, JPMorgan Chase, Bank of America, Wells Fargo and Huaqian were all affected. Treasury bonds, or mortgage-backed securities, that these banks sold aggressively flowed into the market. The banks are all in a storm, and the public can only choose government bonds. The yield of long-term government bonds will not be able to run in the short-term.
Other countries and institutions that have borrowed cheap U.S. dollars for 20 years and invested in long-term products, as long as they buy long-term products, are equivalent to helping others pay interest... This loss will naturally lead to floating losses and possible emerging Market dollar run.
The U.S. economic market has been disrupted. Did Powell think about it when he said that the economy was fine? We don't know, but when emerging markets are on the verge of collapse at any time, the safe-haven attribute of gold has been brought up again. The CPI on Tuesday is last month's data, which may not be bad, but this time it may be just a short-term support, which is short-term negative for gold. If the fire is not extinguished for a day, there will still be people fleeing to the gold market with their families in their arms.
Summarize:
Powell's hawkish speech bets on a radical 50 basis point interest rate hike, and the long-term assets purchased by banks will reduce or even lose money; start-up companies will burn a lot of money and their ability to repay their debts will be weakened; public panic will amplify.
Banks sold treasury bonds and securities aggressively to save themselves, and customers with large and small amounts of money frantically withdrew money, and the run turned into a stampede;
The credit of banks has declined, treasury bonds are favored, and the yield of short-term treasury bonds is higher than that of long-term treasury bonds, which has become an inversion;
This came and went, thunderstorms occurred, the inversion of U.S. debt deepened, and the hedging of the gold market was also stimulated.
However, the general situation is that the early stage has a great impact on the market, but the follow-up is still back on track. For example, the Federal Reserve has already started to rescue the market.
To sum up, it is impossible to cut interest rates, and there will be no interest rate cuts this year, and even want to stick to the assumption of raising interest rates. Could this farce be done by the market to force the Fed to stop raising interest rates? But in any case, before the Fed cuts interest rates, there is still a lot of monetary policy, but there is no need to bet so much for a long time.
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Gold is currently continuing to rise. The rising power is very powerful. So we just keep holding the 1872-1873 long position reduction part in our hands
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If gold can break through 1895, it is bound to test 1900 today
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There will be relatively strong resistance near 1900. Therefore, our 1872-1873 long position can make a profit and reduce the position and continue to hold it. control profit
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very perfect. Gold broke through 1900. We got a big win today. congratulations everyone
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Next, if gold has a better position to go long. I will remind you all at the first time
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Gold rose strongly. Our 1872-1873 longs were on schedule to make big profits. Next need to watch 1910 resistance
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Now is not the time to be short. So don't be in a hurry to sell short. Now it is necessary to observe the strong resistance of 1916-1920 before considering shorting. So now continue to hold 1872-1873 long
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Gold 1872-1873 long order, the current price is to stop profit at 1911, making a big profit of 39 points. Congratulations everyone for keeping up with Miracle Trading Strategies
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That concludes today's trading strategy. Today we have a big profit in gold and bitcoin. I wish you all a great day today. See you tomorrow.