How to Bet Against the World's Central Banks

II HOW TO BET AGAINST THE WORLD'S CENTRAL BANKS Since the Global Financial Crisis in 2008, Central BankS around the world have been engaged in unprecedented intervention in the capital markets, including: Bond Bond 500 Buying domestic & foreign Buying domestic & foreign Buying domestic & foreign Trading in the Foreign Exchange Government Bonds Corporate & GSE Bonds Equities markets Central BankS just "print" money electronically and buy the assets themselves or lend the money, at almost zero interest rates, to Financial Institutions who invest it. So far, nothing has gone wrong – we have avoided another Global Financial Crisis. But if you think this situation is longer term ETĚ trades to watch unsustainable then here are. Bank of Japan: Short JGBS The Bank of Japan has been engaging in Quantitative Easing (QE) since 2001, buying Japanese Government Bonds (JGBS). Japanese Government debt now exceeds 200% of GDP. As Japan's population ages & declines it's ability to support this debt load is being questioned. When confidence goes, JGBS will fall. BANK OF JAPAN JGBS is an inverse ETF, short JGBS Haruhiko Kuroda Covernor Bol ETF Trade: JGBS Nov 18, 2011- Jul 15, 2013 -0.7 (-3.48%) 20.3 20.2 20.1 20.0 19.9 19.8 19.7 19.6 195 19.3 Jan'12 Apr'12 Jur12 Oct'12 Jan'13 Apr'13 Volume (mil / 1wk) 10.7" 0.35- 2012 2013- Swiss National Bank: Long Swiss Franc The Swiss National Bank (SNB) has pegged the Swiss Franc to the SCHWEIZERISCHE NATIONALBANK BANQUE NATIONALE SUISSE BANCA NAZIONALE SVIZZERA BANCA NAZIUNALA SVIZRA SWISS NATIONAL BANK Euro since the Euro crisis in 2011. During that crisis capital fled the Eurozone to the safety of Swiss bank accounts, driving up the Swiss Franc. The SNB intervened by buying Euros & Eurozone treasuries, corporate bonds & equities. The SNB balance sheet is now the size of the Swiss economy! Thomas Jordan FXF is an ETF that tracks Swiss Franc versus USD Chairman SNB ETF Trade: FXF Jun 20, 2008 - Jun 19, 2013 +10.32 (10.83%) 130 125 120 115 110 Y00 95 90 9¢ 9¢ 9¢ 90 2008 2009 2010 2011 2012 Volume (mil / 1wk) 2.5 1.25- uuluull 2007 2012 2013 3 Bank of England: Short UK Gilts The Bank of England (BoE) has also been engaging in QE, buying UK Government Bonds or Gilts. The BoE's balance sheet now exceeds 20% of GDP. Lately the policy committee has been split on whether to continue QE, despite weak UK economic growth. The incoming Chairman, Mark Carney (from the Bank of Canada), will decide which way to go - QE or austerity. XUGS is an inverse ETF, short UK Gilts Mark Carney Chairman BoE (incoming) ETF Trade: XUGS Jul 23, 2010 - Jun 19, 2013 -2196 (-16.74%) 13000 12500 12000 11500 11000 10500 2011 2012 Volume (thous/ 1wk) 20- 2011 2012- 2013 European Central Bank: Short CAC40 The European Central Bank (ECB) is not allowed to directly buy European Government Bonds. To bypass this restriction they are lending to European banks (with minimal collateral requirements) so the banks can buy Eurozone Bonds. If the ECB strategy fails the Euro could fall or rise (depending if peripheral countries left or Germany left) – so short the Euro is uncertain. Instead shorting France, with it's large financial sector, could be a better play. Mario Draghi President ECB SHC is an inverse ETF, short the CAC40 ETF Trade: SHC Jun 27, 2008 - Jul 16, 2013 -23.37 (-35.53%) 100 06 80 70 60 50 2009 2010 2011 2012 201 Volume (mil / 1wk) 2.5 1.25- 2009 2011 2013 US Federal Reserve: Short Treasuries TATES• The US Federal Reserve's successive rounds of QE have been labeled "QE-Infinity" by the media. However, even with this aggressive program the Fed's balance sheet is less than 20% of GDP - the lowest of the major central banks. If the Fed pulls back on QE and the US Government continues to deficit spend then interest rates will rise and US Treasuries could be at risk. Ben Bernanke TBF is an inverse ETF, short US Treasuries Chairman Fed ETF Trade: TBF Aug 28, 2009 Jul 15, 2013 -18.24 (-36.36%) 52 50 48 46 44 42 38 36 34 2010 2011 2012 Volume (mil / 1wk) ...l.lu.ul.llulu uublll .l.d.ll . 2010 2011 THIS INFOGRAPHIC DOES NOT CONSTITUTE "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT. ACTIONS YOU TAKE AS A CONSEQUENCE OF THIS INFOGRAPHIC ARE YOUR SOLE RESPONSIBILITY. omini-watchs EMINI-WATCH.COM IS A WEBSITE ALL ABOUT EMINI DAY TRADING. Better Emini Trading Every Day (C) COPYRIGHT 2013. ALL RIGHTS RESERVED. RISAS EN 15 15