The September issue of SFO magazine (it’s free) is out. As usual, it contains a number of interesting articles that cross the spectrum of the trading/investment world. As a quick aside, when I first turned my attention to learning how the markets work, SFO was the one magazine I read religiously. The writing is clear, the articles are filled with educational material, and the content is as timely as a financial magazine can be in these times of roller coaster like ups and downs.
In any case, one article deals with an issue I wrote about recently, inflation or deflation down the road (“Where’s the Fire?”). For those who read what I wrote, and considered the content, please read this article as it goes into much greater detail than I did (can) here, and it presents the debate in a different light than I presented it, which is always helpful for any one serious about understanding issues.
However, the article that I found most interesting is the one that follows the excellent article on forex trading – “What’s Ahead For The Land Of The Rising Sun?” If you trade forex, or if you want to better understand what the U.S. Federal Reserve has done to defend against deflation, or if you simply want to improve your understanding about Japan for trading or investment purposes, this article is worth reading. Here is one excerpt.
Although Japan’s debt is among the highest in the world … the massive governmental IOUs are primarily domestically held by Japanese individuals and institutions. That is a drastically different profile than for the U.S., which relies heavily on foreigners to support deficit spending.
The above fact explains much about why Japan does what it does fiscally, and it helps me understand the reality of where we are today in this country, a reality that more of us need to understand more clearly.
Folks, I receive so many emails that ask me, “I want to start trading, where do I start?” My answer is always the same – before you invest a single dime into trading, learn the context of markets that trade. This is a tall order considering that the “context” pulls in everything from Japan’s fiscal policies to the ideological battles going on in the U.S. today.
As we have explicitly seen recently, markets move on both good and bad news, which is a lagging indicator. By the time you hear or read the news, the action is over, for the most part. So, to stay a jump ahead, learn the context of trading markets because that is where the news is born. Aside from “events” that simply appear, most news generates from the daily machinations of the world, the interactions between governments, the decisions of financial policy makers, and the ebb and flow of commerce, which, in today’s world, is truly global in scope. Reading SFO started me on the path to understanding the context of markets that trade.
Trade in the day; invest in your life …
