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My Top 6 Reasons Why Most People Fail At Trading

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Many traders fail for many different reasons. I am sure if you have been active in the markets for any decent period of time you will have experienced the numerous obstacles that the markets can throw in front of you. Sometimes the thing holding you back from being successful is one the most basic principles. A high percentage of traders are not able to overcome them, and often have not even considered them. Below you will find my list of the most encountered obstacles which stop a willing trader from making a profit.

 

Find Your Edge

 

So you have a trading system but do you know what makes it profitable? Have you any idea of its strike rate and can you trust it? A question many traders cannot answer. A simple system that gives you 51 winners versus 49 losers from every hundred will make you money if you know how to manage it correctly, but there is an element of trust needed. Before you trade your system you need to properly analyse it to find out how often it wins and how often it loses. How big are the wins compared to the losses? How big is the drawdown? After answering these questions you will gain an element of trust in your system and be able to ride out the lean times to harness the gains from the bigger picture.

 

Stick To A Plan

 

If you are in a hurry to get somewhere you wouldn’t take the long route would you? Would you drive 1000 kilometers without consulting a map? I would think not. Much is the same with trading. Your system (or edge) is your plan and when travelling to your destination you must stick to the highway. Never stray from the plan and ignore any signs that tempt you to try a different route.

 

Don’t Spend What You Can’t Afford

 

Often a big mistake a losing trader will make is to trade too heavy in one single position. To lose a large percentage of a trading account on one trade is suicide and in doing so you are giving yourself a mountain to climb whilst clawing yourself back to breakeven. Not even mentioning the psychological damage it will do. Trade small in comparison to your trading account, the market will always be there tomorrow and trades will come each and every day.

 

Focus On Points Not Profit

 

We are all in this for one reason and that’s to make money, but money is also the root of all evil. By focusing your mind on percentages of your trading account, counting the points won (not dollars) and risk reward ratios eventually the money will stack up on its own. Thinking “I lost 20 points on that trade” rather than “I lost $200 on that trade” will also help you to stay out of the markets emotional games.

 

Learn From Mistakes

 

They say the clever people in this world are the ones who can instantly learn from their mistakes. This is also true when trading. If you repeat the same mistakes over and over its possible you may not have the correct frame of mind needed to become successful in this game. Learn and never look back. If you stray from your plan and lose try to understand the mistake and reinforce to yourself that it will never happen again.

 

Less Is More

 

How much time can you commit to this? This is a question that should be answered well before you select a system. Trade when you feel happy, trade when the markets open, take your money and leave. Often no position is the best position. Overtrading is one of the biggest downfalls of any new trader and will most likely lead to your account (and mind) burning out. Takes some trades and go do something else to stay fresh.

 

Live Your Life

 

Last but not least never forget what you are doing this for. You are doing this to give yourself a better life and more money. Enjoy it, take some time to live your life and don’t get caught up in the trap of being addicted to the markets.

 

Written by Pete Southern, editor at stockpricetoday.com

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One of the reasons so many new traders fail is that they see so many wannabe vendors spouting useless crap....when you are done with the marketing intro, I look forward to reading something useful......something we haven't heard before....

 

Thanks.

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It's possible that like most vendors Pete will never get beyond giving away trite truisms that others give away for free too.

 

More bait for the sucker newbie?

 

If it smells like xxxx and it looks like xxxx, then you'd have to be stupid to taste it. :2c:

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Charming!.. Welcome to the forum Pete..:(

 

It's a first article.. what do you want me to talk about next?

 

Gann, EW, Delta and tons of other stuff I've studied and binned over the years because of information overload..

 

I'll write something on how I trade, no indicators, only price action..

See if that suits you better...

 

Laterz. Pete.

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Actually we don't need you to be charming, but perhaps we could get you to say a word or two about where you come from and what your background is.....What did you do before this....? What do you plan to do here? Do you vend a product or service or both....? Honesty works just fine here however what we see recently are folks who show up and offer to provide something and what they end up doing is trolling for email addresses..Ironically the "first post" often takes a form very similar to yours........its a tough act to follow....Welcome to the forum.

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Thanks

 

Maybe I shouldn't have got a vendor account?

 

I don't actually sell anything.. I write news for the website in the article footer link which provides free real time stock prices and charts etc.. Not selling anything, just posting up some stuff to help raise some awareness of the site I help out.. which in turn only provides a free service..

 

Am on vacation at moment, but will write some other more "useful" stuff when I get back..

 

Pete

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Why You Fail At Trading?

 

Because just like the movie GROUNDHOG DAY, you are doomed to keep repeating your errors until you finally figure it out.

 

But that's just the first part. After you stop losing, you have to learn how to win.

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One of the reasons so many new traders fail is that they see so many wannabe vendors spouting useless crap....when you are done with the marketing intro, I look forward to reading something useful......something we haven't heard before....

 

Thanks.

 

Wow! Give the person a chance before you attack them. Who moved your cheese?

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It's possible that like most vendors Pete will never get beyond giving away trite truisms that others give away for free too.

 

More bait for the sucker newbie?

 

If it smells like xxxx and it looks like xxxx, then you'd have to be stupid to taste it. :2c:

 

We are adults and adults are old enough to make their own decisions. It TL a place where LIBERAL DEMOCRATS gather? Geez... enough of the NANNY STATE MENTALITY.

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Actually princess, you and your "never lose again" type comments represent the same stupid misleading crap that causes people problems when they try to learn this challenging business...so I don't have a lot of patience with you either.....

 

and just to be fair, on the off chance that I am completely wrong...if ANY of you have read this gentleman's comment and from that point on have NEVER been on the losing side of a trade please take the time to say so here on this thread....surely there must be at least one of you....

 

Looking forward to hearing all about that

 

Lovely talking to you...

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:2c:[...

 

and just to be fair, on the off chance that I am completely wrong...if ANY of you have read this gentleman's comment and from that point on have NEVER been on the losing side of a trade please take the time to say so here on this thread....surely there must be at least one of you....

 

Looking forward to hearing all about that

 

Lovely talking to you...

Yes Steve, people who live in glass houses shouldn't throw stones. I enjoyed that contribution because no matter how much you think you know about trading there is always something else you don't know. Don't knock this guy, he makes a lot of sense even though we have heard it all before our minds always need reinforcement of the basic ideas.

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:2c:[...

 

and just to be fair, on the off chance that I am completely wrong...if ANY of you have read this gentleman's comment and from that point on have NEVER been on the losing side of a trade please take the time to say so here on this thread....surely there must be at least one of you....

 

Looking forward to hearing all about that

 

Lovely talking to you...

Yes Steve, people who live in glass houses shouldn't throw stones. I enjoyed that contribution because no matter how much you think you know about trading there is always something else you don't know. Don't knock this guy, he makes a lot of sense even though we have heard it all before our minds always need reinforcement of the basic ideas.

 

by all means gentlemen carry on.....I am still waiting for any person who trades using the Rumpled One's guidance and has never lost.........to say so.....

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Steve -

 

Given the levels of anxiety you seem to suffer when people question your own 'advise' that everyone has seen and read before (i.e. yet another TA based approach), I'm surprised you are giving this chap such a hard time my old cheese.

 

May I respectfully suggest that before trying to intimidate others, you too try and produce something that some of us havent heard or seen before?

 

Try-

 

Something other than TA (TA is all the same old bollox really)

Something other than a proprietary 'secret' like your HFT indicator or Urma Burma's 'magic' indicator

Something other than '10 parables of success' and similar bed time reading.

 

You see, the thing is my old cheese, it's not the method, but the skill in which it is applied that makes the difference.

 

Trading is no different to any other game like golf or football. The rules are the same for everyone. There are countless books on how to improve ones game. There is no 'secret' to how to play golf, football, or the markets. Yet not everyone is a golf, football or trading 'pro', despite all one needs to know being out in the open.

 

The difference between success and failure is inside the individual. Its determination and application. Nothing more.You cant teach that in a gazzillion of your 'Im a guru' threads.

 

Try and be a little more mature please. Theres a good cheese.

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The difference between success and failure is inside the individual. Its determination and application. Nothing more.You cant teach that in a gazzillion of your 'Im a guru' threads.

 

 

Love that analogy of success. How does one get that ? Through hours and hours of endless night's practice or blowing up just a few more than necessary accounts ?

or do you become so driven that failure is not an option ?

I tend to agree with you on this one.

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One of the reasons so many new traders fail is that they see so many wannabe vendors spouting useless crap....when you are done with the marketing intro, I look forward to reading something useful......something we haven't heard before....

 

Thanks.

 

Steve, you right on that part. Gotta friend of mine considering paying 350 a month for an indicator.

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the main reasons- they are not well learned or they are suffering psychological problems.

 

Learn forex first before opening a real account. There is no alternative way to get success without practicing. Work hard, keep patience, you can win.I think that in all business peoples lose money some time and some time they get profit, profit and loss is the part of any business, so do not be take tension, if you will trade with good strategy then never you will get loss.

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Heres a few ideas....

 

not in any order....

 

1. trading the wrong products that are too volatile (fx, crude, etc)

2. paying too much commission

3. greed (see 1)

4. ignoring professional strategies as they are seen as being out of reach or difficult

5. trading like a punter in a casino (ie intraday momentum strategy on an outright), then talking about 'edge' and 'risk management' lol.

6. general ignorance of self and self delusion

 

can I have a 7th?

 

7. joining the herd rather than thinking for yourself (ie trading fx, risking 2%, signals based solely from a chart etc etc - just like the books and gurus tell you).

 

I'm still surprised when folk question why 80-90% lose, when they are all doing slightly different variations of the same thing! 6 months or a few years later - if they are still around, they are still doing the same thing and losing, but they think they have changed what they are doing, yet they havent - they've just changed timeframes, or using a different chart setting, product, etc. lemmings!!!

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the main reasons- they are not well learned or they are suffering psychological problems.

 

I think this says it all..

 

Inexperience looses at the beginning, but psychological issues prevent progress..

 

I have seen this over and over again amongst lots and lots of traders.. Many traders gained a lot of knowledge over the years but can't put it together to make it profitable.. Often its clear they have lots of blind spots that comes from psychological issues..

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Find Your Edge

 

This is the top problem.

 

Most people do not have a winning system.

 

I've never had a problem sticking to a plan but I've had a very rough time coming up with a profitable system.

 

Following the rules of a losing system won't get you anywhere.

 

Breaking the rules of a losing system won't get you anywhere.

 

The majority of systems you see online are either too vague to have specific rules (which gives the "guru" an out if you ever dare to question his instruction), or have concrete rules but don't backtest or forward test profitably.

 

While we're on the subject, beware of any "guru" who says there's no point in backtesting. That basically means "I don't want you backtesting my system and finding that it isn't profitable because then you'll stop paying me for seminars books and lessons."

 

Stick To A Plan

 

Yeah, definitely, assuming you have a profitable system.

 

If you have a profitable system you are 99% of the way there.

 

Don’t Spend What You Can’t Afford

 

For sure.

 

Focus On Points Not Profit

 

Probably more applicable when increasing contract size. If your first trade is a loser once you increase from 1 to 2 contracts, you might not want to see the dollar amount.

 

Learn From Mistakes

 

Definiately.

 

Less Is More

 

How much time can you commit to this? This is a question that should be answered well before you select a system. Trade when you feel happy, trade when the markets open, take your money and leave. Often no position is the best position. Overtrading is one of the biggest downfalls of any new trader and will most likely lead to your account (and mind) burning out. Takes some trades and go do something else to stay fresh.

 

Oh, you mean overtrading. Yeah. Well, stick to your system's signals!

 

Live Your Life

 

Last but not least never forget what you are doing this for. You are doing this to give yourself a better life and more money. Enjoy it, take some time to live your life and don’t get caught up in the trap of being addicted to the markets.

 

Agreed.

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..

Am on vacation at moment, but will write some other more "useful" stuff when I get back..

Some long vacation.

 

I hadn't noticed it almost a year ago since OP started topic and last posted!

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I agree with these reasons, because of them people fail in trading! I have many time spend for which is not affordable to me! and got fail :( so traders should follow "Don’t Spend What You Can’t Afford"

 

 

 

 

 

 

Best Regards

Harrey Martin

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The reason why I failed in trading when I started was because My motive was initially wrong and my approach was terrible. I wanted to make so much money in a short time so desperately that I lost everything I started with. I approached Forex like a gamble and it cost me. Well, that is behind now.

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    • Date: 17th April 2024. Market News – Appetite for risk-taking remains weak. Economic Indicators & Central Banks:   Stocks, Treasury yields and US Dollar stay firmed. Fed Chair Powell added to the recent sell off. His slightly more hawkish tone further priced out chances for any imminent action and the timing of a cut was pushed out further. He suggested if higher inflation does persist, the Fed will hold rates steady “for as long as needed.” Implied Fed Fund: There remains no real chance for a move on May 1 and at their intraday highs the June implied funds rate future showed only 5 bps, while July reflected only 10 bps. And a full 25 bps was not priced in until November, with 38 bps in cuts seen for 2024. US & EU Economies Diverging: Lagarde says ECB is moving toward rate cuts – if there are no major shocks. UK March CPI inflation falls less than expected. Output price inflation has started to nudge higher, despite another decline in input prices. Together with yesterday’s higher than expected wage numbers, the data will add to the arguments of the hawks at the BoE, which remain very reluctant to contemplate rate cuts. Canada CPI rose 0.6% in March, double the 0.3% February increase BUT core eased. The doors are still open for a possible cut at the next BoC meeting on June 5. IMF revised up its global growth forecast for 2024 with inflation easing, in its new World Economic Outlook. This is consistent with a global soft landing, according to the report. Financial Markets Performance:   USDJPY also inched up to 154.67 on expectations the BoJ will remain accommodative and as the market challenges a perceived 155 red line for MoF intervention. USOIL prices slipped -0.15% to $84.20 per barrel. Gold rose 0.24% to $2389.11 per ounce, a new record closing high as geopolitical risks overshadowed the impacts of rising rates and the stronger dollar. Market Trends:   Wall Street waffled either side of unchanged on the day amid dimming rate cut potential, rising yields, and earnings. The major indexes closed mixed with the Dow up 0.17%, while the S&P500 and NASDAQ lost -0.21% and -0.12%, respectively. Asian stock markets mostly corrected again, with Japanese bourses underperforming and the Nikkei down -1.3%. Mainland China bourses were a notable exception and the CSI 300 rallied 1.4%, but the MSCI Asia Pacific index came close to erasing the gains for this year. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.vvvvvvv
    • Date: 16th April 2024. Market News – Stocks and currencies sell off; USD up. Economic Indicators & Central Banks:   Stocks and currencies sell off, while the US Dollar picks up haven flows. Treasuries yields spiked again to fresh 2024 peaks before paring losses into the close, post, the stronger than expected retail sales eliciting a broad sell off in the markets. Rates surged as the data pushed rate cut bets further into the future with July now less than a 50-50 chance. Wall Street finished with steep declines led by tech. Stocks opened in the green on a relief trade after Israel repulsed the well advertised attack from Iran on Sunday. But equities turned sharply lower and extended last week’s declines amid the rise in yields. Investor concerns were intensified as Israel threatened retaliation. There’s growing anxiety over earnings even after a big beat from Goldman Sachs. UK labor market data was mixed, as the ILO unemployment rate unexpectedly lifted, while wage growth came in higher than anticipated – The data suggests that the labor market is catching up with the recession. Mixed messages then for the BoE. China grew by 5.3% in Q1 however the numbers are causing a lot of doubts over sustainability of this growth. The bounce came in the first 2 months of the year. In March, growth in retail sales slumped and industrial output decelerated below forecasts, suggesting challenges on the horizon. Today: Germany ZEW, US housing starts & industrial production, Fed Vice Chair Philip Jefferson speech, BOE Bailey speech & IMF outlook. Earnings releases: Morgan Stanley and Bank of America. Financial Markets Performance:   The US Dollar rallied to 106.19 after testing 106.25, gaining against JPY and rising to 154.23, despite intervention risk. Yen traders started to see the 160 mark as the next Resistance level. Gold surged 1.76% to $2386 per ounce amid geopolitical risks and Chinese buying, even as the USD firmed and yields climbed. USOIL is flat at $85 per barrel. Market Trends:   Breaks of key technical levels exacerbated the sell off. Tech was the big loser with the NASDAQ plunging -1.79% to 15,885 while the S&P500 dropped -1.20% to 5061, with the Dow sliding -0.65% to 37,735. The S&P had the biggest 2-day sell off since March 2023. Nikkei and ASX lost -1.9% and -1.8% respectively, and the Hang Seng is down -2.1%. European bourses are down more than -1% and US futures are also in the red. CTA selling tsunami: “Just a few points lower CTAs will for the first time this year start selling in size, to add insult to injury, we are breaking major trend-lines in equities and the gamma stabilizer is totally gone.” Short term CTA threshold levels are kicking in big time according to GS. Medium term is 4873 (most important) while the long term level is at 4605. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date: 15th April 2024. Market News – Negative Reversion; Safe Havens Rally. Trading Leveraged Products is risky Economic Indicators & Central Banks:   Markets weigh risk of retaliation cycle in Middle East. Initially the retaliatory strike from Iran on Israel fostered a haven bid, into bonds, gold and other haven assets, as it threatens a wider regional conflict. However, this morning, Oil and Asian equity markets were muted as traders shrugged off fears of a war escalation in the Middle East. Iran said “the matter can be deemed concluded”, and President Joe Biden has called on Israel to exercise restraint following Iran’s drone and missile strike, as part of Washington’s efforts to ease tensions in the Middle East and minimize the likelihood of a widespread regional conflict. New US and UK sanctions banned deliveries of Russian supplies, i.e. key industrial metals, produced after midnight on Friday. Aluminum jumped 9.4%, nickel rose 8.8%, suggesting brokers are bracing for major supply chain disruption. Financial Markets Performance:   The USDIndex fell back from highs over 106 to currently 105.70. The Yen dip against USD to 153.85. USOIL settled lower at 84.50 per barrel and Gold is trading below session highs at currently $2357.92 per ounce. Copper, more liquid and driven by the global economy over recent weeks, was more subdued this morning. Currently at $4.3180. Market Trends:   Asian stock markets traded mixed, but European and US futures are slightly higher after a tough session on Friday and yields have picked up. Mainland China bourses outperformed overnight, after Beijing offered renewed regulatory support. The PBOC meanwhile left the 1-year MLF rate unchanged, while once again draining funds from the system. Nikkei slipped 1% to 39,114.19. On Friday, NASDAQ slumped -1.62% to 16,175, unwinding most of Thursday’s 1.68% jump to a new all-time high at 16,442. The S&P500 fell -1.46% and the Dow dropped 1.24%. Declines were broadbased with all 11 sectors of the S&P finishing in the red. JPMorgan Chase sank 6.5% despite reporting stronger profit in Q1. The nation’s largest bank gave a forecast for a key source of income this year that fell below Wall Street’s estimate, calling for only modest growth. Apple shipments drop by 10% in Q1. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • The morning of my last post I happened to glance over to the side and saw “...angst over the FOMC’s rate trajectory triggered a flight to safety, hence boosting the haven demand. “   http://www.traderslaboratory.com/forums/topic/21621-hfmarkets-hfmcom-market-analysis-services/page/17/?tab=comments#comment-228522   I reacted, but didn’t take time to  respond then... will now --- HFBlogNews, I don’t know if you are simply aggregating the chosen narratives for the day or if it’s your own reporting... either way - “flight to safety”????  haven ?????  Re: “safety  - ”Those ‘solid rocks’ are getting so fragile a hit from a dandelion blowball might shatter them... like now nobody wants to buy longer term new issues at these rates...yet the financial media still follows the scripts... The imagery they pound day in and day out makes it look like the Fed knows what they’re doing to help ‘us’... They do know what they’re doing - but it certainly is not to help ‘us’... and it is not to ‘control’ inflation... And at some point in the not too distant future, the interest due will eat a huge portion of the ‘revenue’ Re: “haven” The defaults are coming ...  The US will not be the first to default... but it will certainly not be the very last to default !! ...Enough casual anti-white racism for the day  ... just sayin’
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