How Massive Central Bank Interventions Open the Door to Massive Profits
It’s no secret that central banks are actively intervening in the financial markets.
Since the 2008 crisis, collectively, global central banks have:
- Cut interest rates over 600 times.
- Bought over $14 trillion in assets via Quantitative Easing (QE).
- Printed money to intervene directly in the stock markets or the futures markets.
Back in 2003, had you even suggested these policies were possible, you would have been labeled a conspiracy theorist.
Today, not only do we know that all of the above items are true, but they are accepted as a normal everyday occurrence!
As crazy as this is, what’s crazier is that these policies DO NOT represent the largest, most significant monetary interventions by central banks.
You see, the above monetary policies (cutting rates, QE, buying stocks) focus almost exclusively on the stock and bond markets.
The REAL interventions, the ones that central banks focus on more than anything else involve the currency markets.
The Largest, Most Liquid Markets in the World Are Also the Most Important
Stocks get most of the attention from the financial media because most investors think of them as the most important asset class.
They’re not. In fact, stocks are one of the smallest markets on the planet.
Globally, the stock market is around $80 trillion in size.
That sounds like a huge amount… until you realize that the bond market is more than THREE times this at $244 trillion.
And the currency markets dwarf even the bond markets!
While it’s impossible to know their full size (every currency trade involves two currencies so the net size is impossible to measure), we do know that the currency markets trade an astonishing $6.6 trillion per day.
To put this into perspective, the New York Stock Exchange – the single largest stock market in the world – typically trades just $200 billion in volume per day.
Put simply, the currency market, based on volume alone, is 33 times larger than the stock market. This is the largest, most liquid market in the world.
It’s also the most important one.
If a country’s stock market falls 10% over the course of a month, it makes headlines, but the country’s economy and trade operations continue on as usual.
However, if a country’s currency loses 10% of its value over the course of a month, it has a profound impact on its economy and trade operations.
Among other things:
- Consumer purchasing power falls which leads to higher inflation/ costs of living.
- Debt payments become cheaper or more expensive depending on the currency in which the bonds are denominated.
- Importers and exporters see their operating costs change dramatically relative to revenues.
Bottom-line: maintaining a stable and secure currency is the single most important thing for a country’s central bank. Which is why they intervene on a nearly weekly basis to insure their currencies remain relatively stable.
And this opens the door to truly extraordinary profit opportunities.
Anyone who has been trading the markets for a while has realized that the more a central bank intervenes in a given market, the greater the profit potential that market has.
Between 2008 and today, central banks have intervened in the stock markets more than at any point in history. As a result of this, stocks are in the longest bull market in history, having more than tripled their returns. This can be seen in the chart below.
Bear in mind, the interventions central banks have made to support stocks are nowhere NEAR as significant as the ones they make to support their currencies.
As a result of this, with the right trading system you can double your money with currencies in a week or two… rather than having to wait several years for stocks to produce similar results.
I’m speaking from experience here.
I’ve spent the last eight months developing a proprietary system for trading central bank actions with a specific focus on the Fed. And since its launch, it has handed traders returns of:
- 52% in two days
- 63% in five days
- 75% in five days
- 79% in four days
- Even 100% in just four days.
Imagine doubling your money in less than a week!
$1,000 turns into $2,000 in just four days. $5,000 turns into $10,000…
But here’s the really good part…
My new system is delivering a small group of readers an ~80% win rate! So for the 19 trades we’ve made, we’ve booked profits on 15 of them.
In the trading field, an 80% win rate – with every single winner in the double, if not TRIPLE digits – is UNHEARD OF.
And best of all… this was BEFORE the Fed got more aggressive in the currency markets.
Now that the Fed has the printing presses cranking again, I see lots of opportunities arising this week.
As the markets digest this unexpected Fed move this week, I am opening up my service to a few new readers.
And I want you to join us at a big discount.
First, click here and I’ll show you how my breakthrough system works.
Editor, Money & Crisis