Resources for the Independent Trader Blog

Deal or no deal? There is a deal in

Washington, or is it really a deal?

Dear Reader,

Late hour deal in Washington. It was struck not out of principal, but because of a worst-

case scenario. It is an “agreement, just to avoid default. It would have been disastrous,

if there was no deal.

Chance noted in the op-ed that the shutdown drama was a Republican ploy to gut

Obamacare.

“Many of the Republican politicians behind the shutdown come from the South, and they

want to neutralize and destroy Obama.

The debt-ceiling is raised for now. People are back at work, the USA can pay its bills.

Some “compromises were made on debt, tax, spending, and Obamacare, but the real

problems, is that the US is in more debt. It will look at countries like China to “bail them

out”, again. China is getting fed-up, and is looking at ways to get rid of the dollar.

Martin Wolf on the debt ceiling: The Financial Times columnist says get rid of it:

"Some laws are too dangerous to be allowed to remain on the books. Take, for example,

the U.S. debt ceiling. It is the legislative equivalent of a nuclear bomb aimed by the US

at itself, with the rest of the world within its blast radius. What must never be used

should not exist. Regardless of the outcome of the current negotiations, the law needs to

be repealed.

The issue for the major lenders, who have a stake in the United States’ financial position,

such as China, is whether the U.S. is a trustworthy borrower and, beyond that, whether

the U.S. should occupy the dominant position in global finance that it does today.

Any news is good news for the markets. The US Session yesterday, October 17 – The US

Debt ceiling deal lifts dollar

Posted on October 16, 2013 by the XM Investment Research Desk at 8:43 pm GMT

Risk sentiment was back in the markets after a much awaited breakthrough in

negotiations between bipartisan lawmakers in Washington today that would finally end

the 16-day government shutdown and raise the US debt limit.

News broke late in the US session that a Senate fiscal plan has been agreed upon and

now the Senate has to vote on it later today followed by the House of Representatives.

While there was great relief in markets, many say this deal is just “kicking the can down

the road” since it would only fund the government until mid-January. However, at least a

default has been averted for now. In recent days investors were nervous as the October

17 debt ceiling deadline approached.

The positive news of an end to the debt ceiling impasse boosted the US dollar higher

against most of its major peers.

Dollar/yen ended the US session at 98.81, up 0.6 percent. Earlier in the session the

dollar hit a 3-week high of 98.95, the highest since September 27.

The euro ended the day flat, closing pretty much where it began at $1.3525. During the

US session the pair had a volatile trade, swinging from highs of $1.3566 to lows of

$1.3472. Sterling ended the day 0.3 percent lower versus the dollar at $1.5940.

Sources: XM

“Have a peaceful, purposeful, happy and profitable day”

Pierre A Pienaar

Xcelwealth Store - Business & Investing

-----

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