10 Interesting Forex Trading Facts

10 Interesting Forex Trading Facts

Forex trading is actually over- the- counter financial market for trading currencies and has a global coverage. In the forex market, umpteen different buyers and sellers trade in different currencies and the forex exchange market determines the relative value of each currency. The core purpose of this market is to facilitate the international business community as it allows the conversion of one currency into another. Forex market is also used for speculation purpose and it is all about that how well can you play with a currency in terms of its future worth or value in the market.

For all those who are interested in Forex trading, here are some facts about this system to give you more knowledge on this so let’s get to the 10 interesting forex trading facts.

10. Forex is the most liquid market and so trading is very convenient and easy on this.

9. You have to pay no commission on all your forex dealings, unlike the futures and equity trading.

8. Most commonly traded currencies in the forex market as per the Wall Street Journal Europe are; U.S. Dollar (USD), the Japanese Yen (JPY), the Euro (EUR), the British Pound (GPB), the Canadian Dollar (CAD), the Australian Dollar (AUD), and the Swiss Franc (CHF).

7. Among all the currencies, the hottest currency is U.S Dollar and it is involved in nearly 90% of the transactions.

6. There are some financial institutions which play very active role in the forex trading and therefore account for 73% of the total forex market trading volume and these institutions are; Deutsche Bank (17.0%), UBS (12.5%), Citigroup (7.5%), HSBC (6.4%), Barclays (5.9%), Merrill Lynch (5.7%), J. P. Morgan Chase (5.3%), Goldman Sachs (4.4%), ABN AMRO (4.2%), and Morgan Stanley (3.9%).

5. Although the forex trading encompasses nearly the whole world but the main forex trading centers are London, New York, Tokyo, Sydney, and Frankfurt.

4. The three prime forex trading countries are the United Kingdom (32.4%), the United States (18.2%), and Japan (7.6%).

3. If you have a risk-averse attitude and intend to invest in a safe but low-profile currency then go for the Swiss Franc.

2. If you take an active part in forex trading, then be sure not to miss the world news as it will be of great patronage to you in your dealings in forex market.

1. An interesting definition of forex market by Howard Abell is, “The [Forex] trading system gives the trader the ability to control his or her emotional states rather than allowing them to control him. A [Forex trading] system is a disciplined method for organizing dynamic, ever-changing market phenomena.” I am sure this will help you get a feeling on what is the forex market all about.

World’s Biggest Gold Reserves

The World’s Biggest Gold Reserves

Who Has the Most Gold?

The price of gold eclipsed $1,600 per ounce in July, rising 12.3% in 2011, following uncertainty in the equity markets and the global economy as a whole.

The biggest individual holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world’s gold, holding about 30,160 tons.

1. United States

Value of reserves: $459.04 billion

Holdings total: 8,965.6 tons

The United States Bullion Depository in Kentucky—otherwise known as Fort Knox—is the most famous gold stockpile in the world. It holds the majority of the nation’s gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office.

Altogether, the total gold reserves of the U.S. equal 8,965.6 tons and would be valued at approximately $459.04 billion in today’s market.

2. Germany

Value of reserves: $191.89 billion

Holdings total: 3,747.9 tons

The Deutsche Bundesbank, Germany’s central bank, has 3,747.9 tons of gold reserves, which are valued at about $191.89 billion. According to the World Gold Council, Germany’s gold coffers account for 71.7 percent of total foreign reserves

3. The International Monetary Fund

Value of reserves: $158.77 billion

Holdings total: 3,101.3 tons

The International Monetary Fund (IMF) oversees international economic operations of 185 member countries. Its gold policies have changed in the last 25 years, but the reserves remain to stabilize international markets and aid national economies.

In one such instance, the IMF sold a portion of its reserves in December 1999 to aid the Heavily Indebted Poor Countries Initiative. The 3,101.3 tons of IMF Gold would fetch roughly $158.77 billion in the open market.

4. Italy

Value of reserves: $138.33 billion

Holdings total: 2,701.9 tons

The Banca D’Italia manages Italy’s foreign reserves, which have been reported at 2,701.9 tons by the World Gold Council and comprise the fourth largest gold reserve in the world.

These holdings are worth $138.33 billion and account for 71.4 percent of the country’s foreign reserves.

5. France

Value of reserves: $137.4 billion

Holdings total: 2,683.8 tons

The French National Bank, Banque De France, is home to the country’s gold holdings, which comprise 66.1 percent of its foreign reserves. With 2,683.8 tons of gold in reserve, France’s holdings are worth approximately $137.4 billion

6. China

Value of reserves: $59.47 billion

Holdings total: 1,161.6 tons

At 1,161.6 tons, the world’s most heavily populated country has the world’s sixth largest gold reserve. Expect it to be higher on the list? Well, bear in mind that China’s gold only accounts for 1.6 percent of its foreign reserves. With a population of 1.34 billion, the country holds about $44.38 worth of gold per person, totaling $59.47 billion.

7. Switzerland

Value of reserves: $58.68 billion

Holdings total: 1,146.2 tons

The Swiss National Bank conducts Switzerland’s monetary policy and manages the country’s 1,146.2 tons of gold.

With the world’s seventh largest reserve of the precious metal, Switzerland’s supply is worth approximately $58.68 billion in today’s gold market. It accounts for 17.6 percent of the country’s foreign reserves, though this is down significantly from a year earlier.

8. Russia

Value of reserves: $46.85 billion

Holdings total: 915.2 tons

The Central Bank of the Russian Federation is in charge of the country’s 915.2 tons of gold, which are valued at $46.85 billion and comprise 7.8 percent of the country’s foreign reserves.

In 2009, Russia increased its gold production by 21 percent, due in part to the launch of several new mines. Last year, the country overtook Japan in total holdings, adding more than 140 tons to its stockpile in 2010 alone.

9. Japan

Value of reserves: $43.17 billion

Holdings total: 843.3 tons

Although Japan is ninth on the list, its 843.3 tons of gold account for only 3.3 percent of total foreign reserves. On the open market, Japan’s gold reserves would be worth around $43.17 billion, and are overseen by the Bank of Japan.

10. The Netherlands

Value of reserves: $34.56 billion

Holdings total: 674.9 tons

The Netherlands has the 10th largest reserve on the list, with 674.9 tons of gold. The Netherland Bank manages the country’s national finances, including the gold reserves, which amount to approximately $34.56 billion and account for 59.4 percent of the country’s foreign reserves.

11. India

Value of reserves: $31.47 billion

Holdings total: 614.6 tons

Shooting up in the rankings in the past few years is India. The second most populous nation in the world maintains the 11th largest gold reserves. The size of India’s holdings were bolstered in November 2009 by a $6.9 billion purchase of 200 tons of gold from the International Monetary Fund.

The Reserve Bank of India oversees the country’s 614.6 tons of gold, which are valued at $31.47 billion, comprising 8.7% of its foreign reserves. India’s current ranking may also continue to move upwards, as the government has asked the Geological Survey of India to mine previously untapped gold reserves in many of its states.

12. The European Central Bank

Value of reserves: $28.33 billion

Holdings total: 553.3 tons

Established in 1998 by the European Union, the European Central Bank (ECB) is responsible for the monetary policy of the member nations of the euro zone and is headquartered in Frankfurt.

The ECB’s 553.3 tons of gold accounts for 31.3 percent of the bank’s foreign reserves and would be worth $28.33 billion in today’s market.

13. Taiwan

Value of reserves: $23.9 billion

Holdings total: 466.8 tons

Renowned for its technology industry and robust economic growth, Taiwan also boasts one of the largest gold reserves in the world.

The Central Bank of the Republic of China (Taiwan) manages the island nation’s foreign reserves, which have been reported at 466.8 tons. These holdings are worth $23.9 billion at today’s prices and comprise approximately 4.6 percent of the country’s foreign reserves.

14. Portugal

Value of reserves: $21.58 billion

Holdings total: 421.5 tons

The westernmost nation in mainland Europe is home to the 14th largest gold reserve in the world. At 421.5 tons, Portugal’s holdings are overseen by Banco de Portugal and are valued at roughly $21.58 billion, accounting for 84.8 percent of the country’s foreign reserves.

15. Venezuela

Value of reserves: $20.64 billion

Holdings total: 403.1 tons

Banco Central de Venezuela manages the 403.1 tons of gold in the country’s reserves, which amount to approximately $20.64 billion, representing 64.8 percent of the country’s foreign reserves.

Although Venezuela currently is 15th on the list, it has been increasing its holdings since 2009, when president Hugo Chavez introduced new policies to promote gold extraction and boost the country’s ranking.

Top 10 Richest Countries in the World – 2011

Top 10 Most Richest Countries in the World – 2011

Today we have this post about the richest countries from all over the world. This contains the list of those countries which have highest GNI (Gross National Income) and GDP (Gross Domestic Product) among the other countries recorded most recent in 2011. The higher the rate of the GNI and GDP, richer the country will be. Below is the list:

10). Mexico:

This is the tenth richest country whose GNI amount is $550,000,000,000 and GDP amount is $839,181,900,000 the percentage amount rate of GNI is 1.8%.

9). Spain:

The amount of GNI of this country is $558,000,000,000 and the GDP amount is $1,223,988,000,000 and the percentage of amount of GNI is 2%.

8). Canada:

Canada’s GNI amount is $628,000,000,000 and GNI amount is $1,251,463,000,000 and the percentage of amount of GNI is 2.3%.

7). Italy:

This country has $1,120,000,000,000 amount of GNI and $1,844,749,000,000 with GNI amount percentage as 3.7%.

6). China:

The amount of GNI is $1,130,000,000,000 and GDP amount is $2,668,071,000,000 the percentage of amount rate of GNI is 3.8%.

5). France:

The GNI amount of France is $1,380,000,000,000 and GDP amount is $2,230,721,000,000 with GNI amount percentage as 4.6%.

4). United Kingdom:

The fourth richest country is UK with GNI amount of $1,480,000,000,000 and GDP amount of $2,345,015,000,000 and the percentage of GNI amount is 4.9%.

3). Germany:

The GNI amount rate is $1,940,000,000,000 and GDP amount rate is $2,906,681,000,000 of Germany and the percentage of GNI is 6.5%.

2). Japan:

This is the second richest country with GNI amount of $4,520,000,000,000 and GDP amount of $4,340,133,000,000 and the percentage of GNI is 15.1%.

1). United States:

This is the richest country among all other countries whose GNI amount is $9,780,000,000,000 and the GDP amount is $13,201,820,000,000 and the percentage of GNI amount is also the highest of all other countries, i.e., 32.7%.

The Rule of 72

The Rule of 72

What does the Rule of 72 mean? It is rule stating how long it will take to double your money at any given interest rate. You divide the compound return by 72. This will give you an approximation of the number of years for your investment to double.

Example:

7% interest rate formula: 72/7=10.28 (it will take 10.28 years for your investment to double with a 7% interest rate)

Note: We would be fortunate today as consumers receiving this kind of return on GICS or Dividend Stocks.

12% interest rate formula: 72/12=6 (it will take 6 years for your investment to double with a 12% interest rate)

24% interest rate formula: 72/24=3 (it will take 3 years for your investment to double with a 24% interest rate)

Note: The credit card companies make this kind of return easily when consumers have outstanding balances on their credit cards and only pay the minimum. As you can see your debt will double in less than 3 years with a 24% credit card interest rate. The higher the rate the quicker the doubling of debt.

Sam Latella

6.9 billion and counting…

6.9 billion and counting…

The past week I read an interesting article about population growth, and thought to myself how this could be applied to investment strategies on a long-term marco basis. Here are some of the facts first about our world population and it’s growth in the last 200 years.

In 1804 world population – One billion

In 1927 world population – Two billion (It took 123 years to double)

Remember the Rule of 72 (0.58% growth rate every year from 1805)

In 2011 world population – Seven billion (It took 84 years to double)

Once again remember the Rule of 72 (0.85% growth rate every year from 1927)

Now let’s take the simple notion that human ingenuity, and technology in all fields that are known to man, medicine, biology, food sciences etc. can postpone the human lifespan by another 10-20 years on average, so the average age would be well into the late 90s or 100. Where would our world population be then? And when would it double?

So, lets take a simple population growth rate of 1%, by, 72/1=72, therefore by the year 2083 our world population would be close to 14 billion people. Why, am I explaining this on an investment web-site? Well, lets take a moment for thought, when investing in the long-term you will need to research and discover which areas of business will have the biggest impact on a world population. Could it be food science? Medicine? Computers? Smartphones? The list goes on. Basically, the growth rates in business will always be there, its about businesses finding the right niches, and exploiting the possibilities, and managing their resources properly. Remember, every individual on the planet wants to better their standard of living, and everyone strives to do this daily.

Here are a few other fact finds:

Canada

1950 population 13,737, 000 (population per sq. km – 1)

2000 population 30,667,000 (population per sq. km – 3)

2050 population 43,642,000 (projection) (population per sq. km – 4)

USA

1950 population – 157,813,000 (population per sq. km – 16)

2000 population – 282,496,000 (population per sq. km – 29)

2050 population – 403,101,000 (projection) (population per sq. km – 42)

Africa

1950 population – 229,895,000 (population per sq. km – 8 )

2000 population – 811,101,000 (population per sq. km – 27)

2050 population – 2,191,599,000 (projection) (population per sq. km – 72)

China

1950 population – 550,771,000 (population per sq. km – 57)

2000 population – 1,269,117,000 (population per sq. km – 132)

2050 population – 1,295,604,000 (projection – population control is occurring) (population per sq. km – 135)

Finally,

Over 1 billion adults are illiterate, and 6% of those are women.

27 million people are refugees, and 80% of those are women and children.

1.2 billion people are living in poverity, and 70% of those are women and children.

1 billion people go hungry everyday.

2 billion survive on less than $1 per day.

1 billion don’t have access to clean water.

More then 1000 women die in pregnancy or during childbirth.

Interesting facts when applied to an investment strategy for the long-term.

Sam Latella

Stock Market Strategy

Stock Market Strategy

Criteria

Market capitalizations of more than $500 million

Expected yields of more than 3 percent

Payout ratios of less than 75 percent (the payout ratio is the company’s expected dividends as a fraction of expected cash flow)

Positive expected year-over-year growth earnings per share (EPS)

Positive growth rates over the past five years in EPS, cash flow sales

Pay It Forward

Pay It Forward

Now that the U.S. has fought its way through the Debt Ceiling debate the house was able to easily pass the deal by 269 votes vs 161 votes.

Many have wondered why the U.S. has a debt ceiling? The debt ceiling beginnings were established in 1917 under Article 1 Section 8 of the United States Constition giving Congress the sole power to borrow money on the credit of the United States. The modern debt limit was established by the Public Debt Acts which was passed in 1939 and 1941. The United States has a system based on checks and balances between the President, Congress, and the Senate.

However, if the debt ceiling debate went into crisis mode, and there could be a chance of default. The President of the United States could invoke the 14th Amendment and raise the debt ceiling, of course there would be a legal battle that would ensue, between whichever party invoked the 14th Amendment clause.

The final outcome of raising the debt has kept the U.S. from technical default, but what it really has done is engage the American people into the debt. The next election should be rife with mudslinging from both the Democrats and the Republicans. The preferred opinion by many economists is that the U.S. and World economy are in slow growth phase for years to come.

The reality, is that the U.S. needs to take a hard look at their debt servicing, the U.S. government today is spending 42% more then what they are taking in right now. Also, there are $55 trillion in entitlements that congress has passed over the years, and will need to fulfill eventually. Some of these entitlements are in the areas of medicare, and social security. The next election will hopefully force U.S. politicians to make some hard choices on austerity measures.

The most important duty of each an every citizen in a democratic society, with a constitution, is to besolventin order to create a stable and viable political economy entrenched in democratic principles. The concept is quite simple, however many citizens in the U.S. and other parts of the world do not understand this. Unfortunately, the governments of these countries are in a precarious position and are not making the hard choices.

The U.S. will not go into default it will make those hard choices, but the question is when? They could take a look at their northern counterpart Canada. Back on April 28, 1993 the Government of Canada had it’s rating cut, national debt was peaking at 72% of GDP. The Wall Street Journal was editorializing about Canada’s parlous fiscal state, making it an honorary member of the Third World.

Since then Canada has fixed these problems in a rather short time period, and we are enjoying the benefits in a world that does not seem a certain. How did Canada do this? They cut federal expenditures by 20 per cent, cut 23 per cent of public servants, slashed agricultural subsidies and business subsidies by 40 per cent to 60 per cent, chopped defence spending by 15 per cent, abolished some ministries altogether, and cut transport and science budgets in half.

Of course, they also hiked Canadian Pension Plan and Employment Insurance taxes – er, contributions – and downloaded a ton of federal spending onto the provinces. Lastly, they were helped by a rebounding economy.

Now the U.S. could take a few cues from us, if it wants to stay out of the so called Third World honorary member scenario. These are going to be hard measures let’s look at the timeline of the first fiscal year, 1789 it took the U.S. 198 years to 1987 to deficit spend its way to a $2.4 trillion debt. Which is almost the same amount the debt ceiling was raised on Aug 2nd.

As Peter Schiff wrote last week, The plans on the table suggest cutting a couple trillion in cumulative spending over the next decade. In other words, they propose cuts that only reduce deficits by about 10% to 20%; they do nothing to reduce actual debt levels. So if these talks are successful, then instead of a $1.5 trillion deficit each year, perhaps we only suffer a $1.2 trillion deficit. Meanwhile, the debt continues growing. This is ‘success’ in Washington.

Peter Schiff is right here, as are many politicians, and everyday Americans the hard choices need to be made in order to right size the country. During the Great Recession we had Wall Street vs Main Street, and the hypocrisy that occurred. Now we have Washington vs Main Street an added spice of more hypocrisy. The politicians like to blame business when they don’t have their house in order. Who will blame Washington for their cemented boot syndrome where they are not able to move forward because it would cost them their position politically.

As Congressman Ron Paul memorably stated, Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.

Conressman Ron Paul, is correct here, not only is it a future tax increase, it also means higher interest rates for borrowing, less social services, and social security. I guess, the alternative would be for the Washington and the American People to move this forward, and let the next generation PAY IT FORWARD, but eventually the day of reckoning will occur.

Sam Latella