The Dollar Index is consolidating below resistance at 77.50. Breach of the descending trendline suggests the correction is over and recovery of 63-day Twiggs Momentum above the zero line indicates that the primary trend remains upward. Breakout above 77.50 would offer a medium-term target of 80*.
* Target calculation: 77.50 + ( 77.50 – 75.00 ) = 80.00
Hi Collin, this might work for the Europeans…
Emergency Debt Transfer Mechanism
In times of debt emergencies like the one we have now the correct way to manage a country out of a debt crisis is this:
Open an Emergency Debt Transfer Window for one month
Explained
An emergency debt transfer is when a debtor and a creditor exchange their respective sides of their loan with the government (of the nation the debtor pays tax in), which are replaced by tax credits (for the creditor) and tax debts (for the debtor) of equal value to the loan being transferred
In other words, the government simultaneously collects the debt and pays the loan through future taxes resulting directly from economic growth
A tax debt
A tax debt is created from the amount of debt you have transferred which you are to pay it back through a higher tax rate on your income tax – say an extra 10c in the dollar – the debt can be held at zero interest and slowly be eroded by inflation or at an interest rate which follows inflation
A tax credit
A tax credit is something given to you in place of the debt you are owed which you can use to pay taxes with, which you can also sell for 95c in the dollar to a business in the country of issuance – While you will not get as much back as promised at the issuance of the loan it is far better than having your debtor going bankrupt on you
This system relies totally on economic growth for the repayment of debts and thus gets everyone involved focused on economic growth as opposed to fighting over the payment of debts
The Greek Government
The Greek Government can pay off its debts by issuing these special tax credits to German and French banks which the banks can then on sell to Greek businesses (for 95c in the Euro) to recover their money or use in any business operations they may undertake in Greece
Also tax credits can be given to governments of other countries and then sold in the same way or swapped for trade benefits etc
These tax credits for businesses will have a stimulatory effect on the economy and the austerity will be specifically targeted only at those who owed money during the crisis
This whole system requires economic growth before the creditors can recover their money as their will be a time before all the tax credits can be sold off as companies will not be able to buy them without first having prospects for making profits – this will get everyone working together to get the economy growing again
As the debts wouldn’t normally be paid back in one big lump sum not being able to sell all the tax credits for a few years or even decades is not totally unreasonable
You could say that ‘the Greek economy is so bad there isn’t going to be enough business profits to pay back the tax credits’, but this is still better than Greece going bankrupt and paying nothing back, and if Greece does make a full recovery then all will go nicely over the next ten years for everyone involved
This method of Emergency Debt Transfer will break the debt death spiral we are stuck in and get everyone back to the important business of making life better
Regulating the banks
If the banking system is re-regulated at the same time then this whole debt crisis could be ended before the years end, without one bankruptcy!
What do you think?