The Odds Could Be Good But the Goods Could Be Odd

This time round, those investors who follow nothing but sentiment trends, may well  start feeling that their money is on a runaway train which there  is no way to stop, no way to control, no way of knowing where it is going or when it gets there. Whilst it is true that one cannot make an omelette without breaking an egg, if the egg turns out to be bad, nobody will want to eat it! Whether it is stocks and shares, currencies, or anything else, the same principle applies. It is prudent to know the condition of what you are backing to get at least a decent run for your money.

Sentiment is all very well, but is it a real pointer in the right direction? Does it represent true odds? You can get grey hair worrying about getting grey hair. If a horse is called “Father Xmas” and runs late in December, it is sure to get a following even if the form is lousy. There are also trends which are started in order to be chased.

For instance, when buying a dog you would want to check the pedigree, know about any health data such as sound legs, eyes, etc. When buying a horse, the questions are even more stringent. When making large investments it is prudent to know as much as possible about what you are buying and following a trend may not be good enough in the long run.

The decision to cross a road safely depends on safety checks. There you look right and left and you leave it to your brain to tell you whether it is safe to cross or not. You trust yourself completely. You are certain you can or cannot proceed. However, if a stranger tells you to cross, you would want to look yourself if all is in fact O.K. to cross. There is an element of doubt. If the person who tells you to cross is a friend, the element of doubt is smaller. If the person is your mum or dad, the element of doubt is smaller still. Your instinct also comes into play. Automatically degrees of doubt vary and your actions are guided accordingly.

Often certain data is printed in small print and other data is in larger bold print. Are the positive points printed in bold print or small print? Are the negative points printed in small or bold print? The answer is not hard to arrive at. The trend of the main movement of interest and action tends to follow the bold print not the small print, otherwise why not have it all equally printed?

Following rumours has made more people take the wrong path than the right one even in normal times. Doing the same these days is harder still.

Paul Dubsky
Exchange currency cheap and fast! We charge no commission or fees.

The Deflation Rocket Is In Flight Right Now 

Deflation is the opposite of inflation. When there is a retreat in the level of prices things point to deflation. The actual extent of the damage to the economy may well be potentially much higher in case of deflation than inflation.


When collateral collapses, the Banks begin to wobble under the strain and of course the falling home values play a major role, and inevitably credit tightness looms. Naturally, any chance for growth is quickly dampened. It also follows, that with property prices sliding down further, the credit crunch becomes worse. Further down the road, this will discourage a rise in prices and encourage a drop in prices, thus creating a perfect climate for opening the door to deflation.


Banks will start piling money. In order to lure in more cash deposits, some might offer more attractive interest. On the horizon, a picture will emerge of endless heaps of products needing buyers. This will force the prices to go lower and lower.


It is unlikely that anybody will wish to invest in those circumstances, and the prospect of getting jobs will deteriorate.


Financial systems are sensitive to general tendencies or directions. Thus, any slight hint of changing conditions from good times to bad times can trigger confidence to change from good outlook to gloomy outlook. The lending appetite as well as the borrowing appetite shrinks, which means that ultimately the prices of goods fall.


The cocktail of debtors, creditors, consumers and producers laced with a negative trend, will set off a warning siren. Once the creditors begin to worry it is hard to contain their fears. The supply of money begins to dry up and cash is king.


When the supply of goods goes up quicker than the supply of cash, favourable conditions for deflation begin to gather. The ability to lend or borrow is a problem which seldom has happy endings unless a great deal of effort is given to solve it. There is no inoculation to make one immune to the disease of deflation because the component part of the disease is not necessarily always completely the same, albeit very close. Whatever happens, it will take quite a while to get rid of it.


The thing to be aware of is not to get into a situation which makes people wait and not buy because they think prices will go down. This makes for an acute spiral of lowering prices with no end in sight. As a result, the factories cannot make money and get into more and more trouble, and consequently redundancies start gathering pace.


Paul Dubsky 

Foreign Currency Exchange



Straight Answers Are In Short Supply


The evaporation of the extraordinary strong housing market, which played the role of the darling benefactor to thousands of people for so long, means in a nutshell, that the party is now over.


What it also means, is that many have enjoyed things that came to them too easily and early in their lives, and who will now have to face the real world which requires a great deal of effort in order to enjoy the good life. Largely, the blame of course lies with those who offered so much credit to such a vast number of ready takers, unaccustomed to handle big money.


There is no automatic yes to the question if first time buyers are the ones most punished. The answer could well be that Mum and Dad suffered more, because in most cases they were the ones who borrowed money on their house which went up in value and provided the young couple with their deposit etc. The arrival of the crunch means that lots of youngsters are behind with their payments. No doubt the parents are being approached to help out yet again. Unfortunately, this cannot go on forever.


Now that the price of housing is going significantly down with worse to come, for an elderly couple to owe money in a rapidly approaching negative equity situation on the property they borrowed is not an ideal position to be in. As regards the first time buyers who are more often than not young people starting in life, they will again pose further strain on Mum and Dad by asking permission to live with them. This often means bringing in their little ones as well, which can cause further inconvenience. By increasing the number of occupiers in a household by more than 100 per cent, the parking strain is also bound to cause problems.


The answer to the question as to how long the belts have to be tightened cannot be given accurately. It is important to be aware and accept the events as they unfold, rather than build castles in the air. A formula must be found for people to adhere to the realization that there is no such thing as easy money from now on. People with very little cash would do well to remember that many millionaires were made by those who were poor, but not afraid of the difficult challenges created by hard times.


There is no doubt that the present generation has been unaccustomed to respect money in the way their parents had to. This is not their fault, and it has been hugely detrimental to them. To wait and save up money to buy a car was the normal thing to do in the old days, whereas now it seems that to put down next to nothing and drive away is the way to go. The arrival of credit cards made it possible to obtain many items instantly. There is nothing wrong with that, except dishing out credit cards to every Tom Dick and Harry, was a formula for disaster. Ensuring not to issue cards in a nonchalant way is important. Of course it is unpopular to make things harder to get, and it certainly is unpopular for many businesses to see that happen. However, look where it got us!


Paul Dubsky

Exchange Currency 



You Count on Your Bank but the Bank Count on You Even More


We are well aware, that banks rely on the fact that not all their depositors will wish to withdraw their cash at the same time, because if they did, the banks would not have the cash available to meet all the demand. Some people might wonder why the banks would not have enough money to pay every depositor out.


When a client places cash into his or hers account, the bank will invest it for themselves. They will credit your account with the sum you deposited with them, but the actual cash will have gone to earn more interest than you will get. The chances are you will leave the cash in the bank without taking it out, or taking out only a part of it. But if you did want to take it out, there is cash from other depositors which can be used to deal with it. Providing there is no situation where everybody wants their money out at once, the banks have nothing to worry about on that score. They make money with your money, and they pay you a bit as well, so you are happy.


This all works very well unless there is a time when people fail to meet their obligations, and do not keep up the payments on their loans. Banks expect the odd case here and there, when someone cannot pay because of a bad investment or sudden personal difficulties. When there is a situation due to certain economic problems which can cause trouble to thousands of people to meet regular promised repayments, the matter is serious because cash must keep coming for the banks to keep the show on the road. Without that expected cash, the machine can stop. Liquidity is the vital.


To understand it better, imagine that you need money and you get cash advances from a credit card which we will call A. When you reach the credit limit you will have to make a minimum payment which you have not available, so you decide to get cash from another credit card B, and when that is due to be repaid, you use credit card C and so on. There comes a time of course, when you run out of credit cards and you have to make repayments from somewhere. Unless you sell the car or an item of some value or obtain a loan from some good fairy, you are going to go under.


The banks have an easier task, inasmuch that they can turn to the central bank to borrow money to get them over their liquidity problem. Nobody wants to allow a run on a bank, since it can trigger off other stampedes. It is a bad idea to cause people to lose faith in the banking system as a whole. In other words, it is not prudent to allow banks to go to the wall, and help will invariably be found, unless there is absolutely no other way.


We are now reaching the point when shortage of money available to the banks spells out shortage of money available for them to lend out.


As a consequence for instance, the housing market gets slowed down. When the house prices suffer, it is largely because the borrowers cannot get the money to make a purchase and not because they do not wish to buy. And even if the prices go down further, they will still not buy, simply because they will still find it hard to get a mortgage in the present climate.


As usual, at the end of the day, people who have cash money will be able to snap up some real bargains and wait until conditions change and make their profit. The bargains will be available in America as well as here and in other parts of the world.


While banks make money from your money, they earn a little for you as well. They also provide a number of services without which, life would be hard. However, you must not belittle your role in all this, meaning that although you need them, they certainly need you!


Things were going right for a large number of people for quite a time when money was cheap and easy to find. Until such times reappear, it is the turn for the smaller number of people with ready cash at their disposal to step in soon.


These lucky people, will find terrific deals waiting in the offices of friendly and good realtors in USA, in the UK, on the Continent, as well as in other parts of the world. Based on realistic prices, a lot of the properties will be sold in the main to cash buyers able to get their foreign currency from the foreign currency exchange companies at very good rates, especially if they phone around for the best deal. Yes, cash is King.


Paul Dubsky

Currency Exchange


The Evils of Inflated Credit


The questions of currency and credit are closely interlinked. The inflation of credit does not necessarily lead to inflated currency, and deflated credit does not necessarily lead to deflation of currency, provided the balancing act is done carefully. A spanner in the works can cause all sorts of problems.


It could be argued that the inflated credit, a phenomenon which came in handy some ten years ago, helped the wheels to go round particularly creating rising costs in house prices, notably in the UK and USA. This is the culprit, which is now causing a sharp reversal towards a deflated credit period.


For instance, if an inflated credit situation made for house prices to rise to start with, an unsound currency period can follow, and thus carry the evils further.


Is it reasonable to expect that it is safe to extend credit to someone when that someone is borrowing constantly somewhere else against mere IOU notes? If currency was to follow the same path, it would become very unsound.


When problems start to build up in the private and public sector, steady and determined self denial is prescribed as a medicine. However, the condition of the world today is one, which cannot allow uncontrolled severe restrictions on expansion of credit with an easy heart. What is likely to be needed is justifiable expansion of credit which sanctions the demands of the manufacturing and trading sections in particular. Such credit of course, cannot be given without careful monitoring, since the tax payers cannot be expected to bail out banks if unworthy allocation of credit is continued.


Mostly, people are interested in the housing front. We are getting to the point where houses are hard to sell because the lenders might have problems as well as the borrowers. Often, a house would sell and is just the one the buyer wants, but he cannot get it because he cannot sell his house, as money is not made available to his buyer. Where it was possible to find a solution in the past, today it is not all that easy.


In other words, it is not the price of the house that is necessarily the problem, but the difficulty of finding someone who will give approval to lend, as well as possibly someone who actually has the money to do so.


If everybody had their houses fully paid for, cash indeed would be king, and business would be brisk. To find a buyer and a seller who both have their houses fully paid for and have cash to spare, can and does happen, but not often. That type of buyer and seller is the dream for the real estate companies, because they know that the only hurdle needed to jump, is whether the buyer likes the house and not whether he will get the money to be able to purchase it.


So, is it all gloom and doom or is there a way out? In due course things will improve like they mostly do, but until that can happen maybe it is best to fasten our safety belts for a bumpy ride. Things were good for many years and now there is a price to pay for that easy credit given so freely.

The boat is in high waves with more on the way, but it will sail into calmer waters as time goes by. Everybody will be that much wiser, and any damage will be eventually repaired. After all, things do run in cycles.


Paul Dubsky

Currency Exchange Services

Few Want to Risk, All Want to Win

This applies to any type of business under the sun, especially to property and currency. Staying on the side of value, which is what bookmakers do, ensures that in the long run you are a winner.


There are several tips how to stay on the side of value:


1.Doubling your stakes is madness. Remember if you flip a coin a thousand times and it comes up tails, the odds are still even money that it will come up tails the next time you flip it!

Conclusion: Investing lots of good money just to get back what you are losing plus a little profit, is making the risk is too high and the return too low. You are not on the side of value. Keep away from deals like that, but if involved, cut your losses and stop as soon as you can. It is far better to wait for value when trying to recoup.


To keep on buying falling foreign currency in the belief that it is bound to go up any minute, is a similar kind of example. More chance to recoup will come, when the sentiment is showing signs to support the currency you bought. Value will be knocking on the door.


When it comes to housing, value comes into play again, whether if you are selling or buying. If selling, value is found in investing a little to make the house look that much better. Whatever amount you invest to make the house nicer, it will return back twice as much, and surely help to sell the property quicker. Many sellers think that it is silly to make improvements to a house they no longer want. Yes, but they have to sell it first. If you are buying, the value is better when the prices are down rather than up. Not many lose in the long run on houses bought at sensible prices.


2.When the risk is big and the gain is big, there is no point in getting involved.


3.When the risk is small and the gain is big, in the long run you profit.

4.When there is no risk and the gain is big, beware, unless you are a burglar.


You would think that all you have to do is to follow rule 3 to succeed. Maybe so, but it requires one more thing which is, to have the rare ability to convince yourself to wait for value. Very few people have that, hence they lose money.


If you cannot find value by yourself go to experts who can.


I used to know a fellow, who thought himself a dab hand at being able to always foretell foreign currency exchange trends, but otherwise, he was quite normal. Last time I heard, he married a rich old widow just in time to avoid financial problems. I hope he got value. 


Paul Dubsky

Currency Rates


Calculating the Probability and Possibility of Success of an Investment



The probability of a specific outcome and presumption that the outcome result is measured in terms of the odds is fine providing the odds are the true odds.


The odds are numbers designed to show, what the speculator will receive for his outlay when betting on a certain event. It does not matter whether the event is a horse race, or price fluctuation on the foreign exchange currency market.


To be guided by odds formulated by bookmakers is to be guided by their necessity to balance their books because of the public weight of money invested for a particular result to happen. This is their key to the measurement of the odds.


To presume that odds formulated this way is a pointer to a winner is a delusion. Only true odds can do that.


So what are the true odds as opposed to just odds created by the market/bookmaker?


Supposing there is a horse running in a race which is called Father Xmas, and because it is Xmas time, a lot of people will back it, liking the name. Their money will create a demand, and the odds will shorten. These are not true odds representing the winning chance of the horse. These odds are market oriented odds which do not represent the actual capability of the selection.


So what are the true odds needed in your corner to point to achieving a good result?


It is the process of weighing up what will not happen rather than what will. Finding out the real form of the selection based on a series of past performances under various conditions and a host of other data will direct us in the right direction. It means engaging serious attention to any minute point and having the ability to go by that.


Applying this to foreign currency, means that one cannot be constantly under the spell of how the market behaves, but must take the numerous circumstances into account to form an overall picture.


There are times when governments support their currency which might appreciate as a result, but often only for a very short time. That sort of thing does not necessarily signal to buy that currency, and does not represent true odds. However, a temporary following of a trend can often be productive, and spotting it early can mean getting true odds in your favour.


Realizing that certain currencies tend to behave differently at holiday times is most important. Currencies even tend to behave differently at certain times of the day. Learning to spot this is helpful, and is a plus.


The days when certain important data is being released are imperative to bear in mind.

Also are the days, when important people are due to make a speech.


Negative news about the currency you wish to beat can be positive news for the currency you are holding.


Looking for the negative points about the currency you are opposing can be sometimes more productive than looking for the good points about the currency you are holding.


Ideal conditions are when the positive data lifts your currency, and the negative data drags down the other currency at the same time. Now, you are set to fasten your safety belt with great pleasure. That is also the time, when the foreign currency exchange game is like any other game, only more so.


I have often maintained that bookmakers seek to have the odds in their favour, and I do not know of any poor bookies. It is prudent to always follow their example.


The foreign currency market is very strong and full of players. There is never a shortage of money to take out for the well informed, and there is a bottomless black hole for the reckless punters to throw their money into, especially the ones with certain systems.


I used to know a fellow who rarely wrote letters home to his folks, but did send brief telegrams saying system going well  please send more money.


Remember, that one of the odds in your favour is to deal with the foreign currency exchange companies who are cheaper than the high street banks. You can bet on that.


Paul Dubsky

Foreign Exchange


Keeping in Touch with Some Basics How Banks Operate


There are some people who may wish to know a little about what banks are all about, especially when these financial institutions have had to swim in rather troubled waters just lately.


Banks are here to make money. It is hard to manage without them, and it is hard for them to manage without us. On the face of it, this looks like a marriage made in heaven. However, since all marriages are based on absolute trust and hate turbulent situations, and because these two features seem to be coming into play, it is not surprising that this is causing a certain amount of concern to depositors.


Basically, a client places money into his account. The bank will lend that money to other clients and make a profit on the deal. If the client banked say $10000, the bank can lend $90000 out because they must maintain a 10 per cent cash reserve ratio. In other countries, the cash reserve ratio requirement can be higher or lower. Any country can decide to alter the cash reserve ratio if needs be.


There is nothing to stop a bank to set aside more than the required minimum, meaning having excess reserves. It is not particularly rewarding for banks to do this, since they get no interest on that money, albeit they can channel it out on short and overnight terms to banks which need to maintain their minimum reserve ratio.


Getting back to that $90000 the bank can lend out, and let us say grant overdrafts but creating of course a liability factor, as the bank has to pay out whenever the various borrowers issue their cheques.


The position of the bank is that it has a total cash sum of $10000 received.

However, it has lent out deposits of totalling $90000. Add this together and you get a figure of $100000 representing total assets which are the $90000 in overdrafts plus the original $10000 cash received, which of course includes the required 10% reserve.


What took place is that the bank granted loans worth $90000 giving birth to money which did not exist before, based on the $10000 received in cash and locked in the safe.


People do not put in all the money on the same day, and they do not take out all the money on the same day. Cash in form of bank reserves is there to meet some withdrawals that may possibly be required. Banks have been managing quite well with small cash reserves in their safe, because they hold a number of liquid assets which they can sell for instant money. It is better for them to earn more money out of these liquid assets than having cash. Bankers are clever enough to know what kind of mixture of investments they should hold not to be caught with their pants down.


As well as lending money both short and long term, banks place investments in other areas. For instance, apart from the liquid assets, they can purchase long term government bonds and other securities. However, without cash reserves it is not possible to give birth to additional money unless breaking the rules.


Of course banking is far more intricate than that, but at least one can grasp some basics, and understand why, when a spanner is thrown into the works due to whatever reason, hiccups can follow.


Paul Dubsky

no commission or fees !


When Adrenaline Addiction Takes Over


There are certain people born with a natural tendency for impulsiveness. Quite

a number of these tend to lean towards gambling, the driving reason often being adrenaline addiction.


When the central nervous system needs more stimulation, it seeks to find bigger thrills to feed on.


It is known that forex trading can provide huge thrills, and to approach this business allowing the adrenaline addiction to dictate, can turn out to be very costly.


When muddy data play a part in forming an opinion, and added to this, decisions are made spurred on by adrenaline addiction, it can be a formula for disaster.


Adrenaline addiction can make people sacrifice quality to get instant results. This can lead them to take steps which are not properly planned, and more often than not, result in failure. In forex trading one must beware of this problem.


Many executives and leading political figures are prone to this kind of addiction, which explains why at times, they tend to make certain hurried regrettable decisions. Adrenaline addicts are not frowned upon like some alcoholics, but are given full marks for being constantly on the go, and praised for their relentless efforts to try and achieve their goal.


Bookmakers and casinos are rescued time and time again, by shrewd punters, who when thinking clearly are hard to beat, but when under pressure, allow adrenaline addiction to take over, and start making erratic decisions which costs them dearly.


We have all seen some very high wired tennis stars, boxers, film stars, and footballers, who thrive when constantly in the limelight, only to dwindle to serious boredom when out of it, which in turn, leads to their thrill seeking that can have serious overtones.


The bottom line is to stay in control and keep cool at all times. You have to slow down sometimes to win.


The ability to create and sustain adrenaline may be of help to propel an executive or sportsman forward, but it can backfire. Wear and tear on nerves and tissues will eventually be the result.


Adrenaline is what our body fabricates to give us a boost to meet a challenge. When there is a crisis, adrenaline turns up because there is a need to make a fight of it


There are people who just will not let go and must be buzzing non stop. They will be on the phone all the time, make notes and calculations. Even if they seem to be relaxing, they are planning their next moves. Hyperactive people are constantly in action, but can eventually start getting burnt out and become bored. At that point, they will tend to seek those higher and higher thrills, in order to get the adrenaline going,

since smaller challenges will not be good enough to get it produced. It is only a matter of time before they are in danger of getting into troubled waters.


It is not all that hard to become an adrenaline junkie, and although on the face of it, to be hyperactive would seem to be beneficial in some line of business but as I said, it can bring about hurried decisions and mistakes. In the business such as forex, banking, betting, bookmaking, driving etc. making even one mistake, can be catastrophic.


The possibility of what adrenaline addiction can cause, must never be underestimated and must be borne in mind, especially by those who are in positions where there is no room for mistakes.


Paul Dubsky 

Live Exchange Rates




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