Monday morning open levels - indicative forex prices - 20 December 2021

[OZER]

Good morning, afternoon or evening to all ForexLive traders and welcome to the start of the new FX week.

On a Monday morning, market liquidity is very thin until it improves as more Asian centres come online.

Prices are liable to swing around on not too much at all, so take care out there.

Guide, not a lot of change from late Friday, AUD up a few tics. The weekend but a slight easing in some coronavirus restrictions despite the Omicron outbreak:

EUR/USD 1.1241
USD/JPY 113.64
GBP/USD 1.3244
USD/CHF 0.9232
USD/CAD 1.2889
AUD/USD 0.7142
NZD/USD 0.6750

[ontine]

I don't know which of them are bubble, but I know where are all those airs in the bubbles come from, the fed.

[laborious]

They're talking about run-of-the-mill inflation driven by wage-price spirals, and saying that's how you get an inflationary spiral. In my mind, that's not the only way. We have a fiat currency and it's value is really derived from people's faith in it's value. You can print money and encourage borrowing etc, but much like stock market bubbles, there is a tipping point in there when all the feedbacks turn from negative to positive.  Normally, you hold money, it holds it's value, there's no real push to gain or spend it. If you think inflation is going to increase, it now becomes a hot potato that you want to spend as soon as you get it. You do this by buying useful assets like houses, land, food, things you need. When everyone does this it drives up the price, which would normally dampen demand, but if the expectation that money will continue losing value and the price will only increase, then the price doesn't matter anymore. Sellers can ask arbitrarily high prices. But who's going to sell into this and accept that money? Thus supply goes down at the same time demand goes up, further exacerbating the situation.  The government has been pumping new money into the economy to try and stimulate it, yet velocity stays low. Who needs to spend all that money under normal circumstances? But what happens when it all starts losing value? All that "cold" money suddenly turns hot, and the *effective* money supply suddenly increases. Meanwhile, everyone is also incentivized to borrow as much as possible to "short" the currency, further increasing the supply. But who wants to lend into this? The credit market slows, and the government steps in as "lender of last resort" again....using printed money.  Meanwhile, the massive amounts of money tied up in the stock market suddenly need a new home. I mean, who wants to hold a stock when all you can get out of it is increasingly worthless money. You paper gains are impressive, but it's only a reflection of the fact your asset is losing value, because the only value it has is denominated in dollars (rather than any kind of tangible use).  I mean it goes on and on. Wage-price spirals may be a part of 'normal' inflation but they don't really play into hyperinflation.

[captainvenom11]

Bitcoin is the best way against inflation

[elfnexx]

Huobi group is a scam company. Their cryptocurrency is not recorded on blockchain and Huobi will withheld your ability to withdraw your assets.

[terfel]

Money printer went brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr!  Inflation goes uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuup!

[titanickid47]

It can be but people dont want to work hard to do it

[instigation]

Food and Energy prices seem to affect more Citizens than the other effects..... The FED seems to overlook a lot of citizens when they review prices....

[frivolity]

The economy is in transition from a 20th century to a 21st century economy. They are wanting to use 19th century tools to try and fix it

[zazer101]

Refugees Token is the next 100x

[Xenos]

It is everything bubble.

[Pilot]

Yes remove the people causing it and it will it's being done on purpose

[The_URRU_]

As long as both sides of the political aisle over spend wildly like they have for decades now (and then blame each other) we'll continue to swirl the drain.  Politicians on BOTH SIDES have caused this crisis, but hey don't worry about them, if things collapse they'll eat well and have bunkers to hide in.

[mischam1216]

It's supply and demand; demand is high and supplies are low. Get the supply situation fixed and things will improve.

[briancoyle]

That research paper had an opinion not an objective study. Has economics in America also gone woke!!!