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Author Topic: Retail Over the Counter Trading illegal in the free USA from 15 July 2011  (Read 2962 times)
cloud9
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June 27, 2011, 09:43:48 AM
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Seems like not just Bitcoin commodity trading (Bitcoin commodity also referred to as internet currency, due to ease of online transfer and exchange) is under attack.

From 15 July 2011 it will be illegal to do over the counter trading of metal currency at forex retail providers for all US citizens in terms of the recently enacted Dodd–Frank Wall Street Reform and Consumer Protection Act.

https://www.kitcomm.com/showthread.php?p=1408112
http://www.forexfactory.com/showthread.php?p=4721826
http://www.forexfactory.com/showthread.php?p=4725167

Are Elitist, Protectionism measures rife now?

Is Hyperinflation imminent like in Weimar Germany?  http://www.shadowstats.com/

How much confidence in the US currency do regulators have when all these protectionist measures are put into place.  It is definitely not protecting the consumer who would like to hedge himself against excessive inflation in what used to be a free market.  Most easy hedging with commodity currencies are now criminalized in the US.  How do you hedge yourself, if easy accessible hedging measures are being criminalized?  Now hedging will only be for the select few who meets entry requirements for more steep entry requirements like full-blown e-miny gold futures contracts - talk about equality...  What happened to Liberty, Egality, Fraternity - or are some now more equal than others?  Maybe the french should take back their Statue of Liberty gift or maybe the United States should have imported and re-erected the broken down remains of the Berlin wall around it at Staten Island.

http://en.wikipedia.org/wiki/Libert%C3%A9,_%C3%A9galit%C3%A9,_fraternit%C3%A9

Is the free world going back to pre-1789 France?

Disclaimer:  Postings of Cloud9 are only individual views of opinion and/or musings and/or hypothesisses.  On a non-authoritative, peer-to-peer public forum, you do not need permission from Cloud9 to derive your own conclusions or opinions, so please do.  Calculations and assumptions to be verified.
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Tasty Champa
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June 27, 2011, 09:50:08 AM
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"Precious metals that are fully paid for or actually delivered within 28 days are not affected. "

http://www.reuters.com/article/2011/06/22/precious-metals-regulation-idUSN1E75L1XB20110622
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June 27, 2011, 09:57:27 AM
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"Precious metals that are fully paid for or actually delivered within 28 days are not affected. "

http://www.reuters.com/article/2011/06/22/precious-metals-regulation-idUSN1E75L1XB20110622
This is  very smart move, you dont ban it but in practice 99% people will not able buy it due restriction.
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June 27, 2011, 10:00:13 AM
 #4

"Precious metals that are fully paid for or actually delivered within 28 days are not affected. "

http://www.reuters.com/article/2011/06/22/precious-metals-regulation-idUSN1E75L1XB20110622
'A non-ECP is essentially a retail customer.'
This is  very smart move, you dont ban it but in practice 99% people will not able buy it due restriction.
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As a result of the recently enacted Dodd–Frank Wall Street Reform and Consumer Protection Act, U.S.-based retail forex dealers such as OANDA are prohibited from offering leveraged trading in precious metals to retail clients after Friday, July 15, 2011.
Sorry for duble post.
cloud9
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June 27, 2011, 10:07:36 AM
 #5

"Precious metals that are fully paid for or actually delivered within 28 days are not affected. "

http://www.reuters.com/article/2011/06/22/precious-metals-regulation-idUSN1E75L1XB20110622

Maybe its a blessing in disguise,

Although there is a lot of costly hurdles to overcome now for such an enactment - postage, insurance, insurance and insurance - wont you know at least about your loss immediately when physically holding your coin, bar, trinket, or whatever - that when it is seized by decree in future (as happened in the 30's) and not when this whole, confidence in paper promises, circus collapses and nobody deliver on any promises anyhow?

Disclaimer:  Postings of Cloud9 are only individual views of opinion and/or musings and/or hypothesisses.  On a non-authoritative, peer-to-peer public forum, you do not need permission from Cloud9 to derive your own conclusions or opinions, so please do.  Calculations and assumptions to be verified.
cloud9
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June 27, 2011, 10:52:36 AM
 #6

The source post states that it affects "leveraged trading" of the four metal/currency pairs. 

Trading on a 1:1 (or fully paid as stated above) doesn't seem to be affected.

Unleveraged hedging is expensive and requires a greater capital commitment - just for hedging purposes.

Disclaimer:  Postings of Cloud9 are only individual views of opinion and/or musings and/or hypothesisses.  On a non-authoritative, peer-to-peer public forum, you do not need permission from Cloud9 to derive your own conclusions or opinions, so please do.  Calculations and assumptions to be verified.
cloud9
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June 27, 2011, 12:05:21 PM
 #7

The original post sounded like it was a total outlaw of trading these.  

Is it bad news for Americans and the freedom of USA... Yes.  America seems to be going in the wrong direction on many fronts these days..

Agreed.

It is like saying, OK we're seeing an astroid (a financial astroid in this case) is probably going to hit Hawaii, but hey - we don't accept payment of insurance premiums (/ leveraged metal currency trading) any more against this probable disaster if you're a small guy - you now need to sell your house in Hawaii and rebuy one on the mainland if you want insurance against this disaster - we do however still take corporate premiums.

And why the discrimination against small, man in the street, retail investors, wanting to protect the future and life savings of their families, in the most effective way against a national cataclysm on the scale that Portugal, Iceland, Ireland or Greece (PIIG's countries) have experienced lately?  But then they had the Eurozone absorbing the shock.  Who will absorb the cost for the US - the world? China? Other holders of US denominated script/currency/bonds/notes/stocks/options?

Someone will have to pay the price for a negative real interest rate (interest rate after inflation has been taken into account).  And big business do not seem to want to foot the bill.  Will retail leveraging of metal currency accelerate the inevitable downfall of the inflated USD, and maybe big business is not readily positioned for that yet?

If you have invest in any options/script/notes/currency/stocks/bonds/etc. denominated in USD you would like to hedge yourself against the failure of the USD by something that has been known for millenia to withstand inflationary pressures.  In a fractional reserve, leveraged economy you would experience difficulty to hedge a leverage position in options/script/shares/bonds/etc. denominated in USD if you can only hedge in an unleveraged way 1:1.

Disclaimer:  Postings of Cloud9 are only individual views of opinion and/or musings and/or hypothesisses.  On a non-authoritative, peer-to-peer public forum, you do not need permission from Cloud9 to derive your own conclusions or opinions, so please do.  Calculations and assumptions to be verified.
cloud9
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June 27, 2011, 01:39:27 PM
 #8

The only other solution for small investors for protection against the inflating USD would thus be hedging with a commodity rich currency like the Australian AUD which correlates well with commodities (other examples might also be Canadian CAD to a lesser extent, or Swiss Franc CHF).

How long before leverage forex trade in AUD. CAD and CHF is also prohibited?  What will be the result of this?  End of forex markets - very low liquidity in forex markets - a one world de facto commodity backed currency?  Or just a de jure protected USD world currency?

Disclaimer:  Postings of Cloud9 are only individual views of opinion and/or musings and/or hypothesisses.  On a non-authoritative, peer-to-peer public forum, you do not need permission from Cloud9 to derive your own conclusions or opinions, so please do.  Calculations and assumptions to be verified.
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June 27, 2011, 04:57:23 PM
 #9

The law is simply preventing the "leveraged" purchase and sale of precious metals.



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June 27, 2011, 05:27:47 PM
 #10

The law is simply preventing the "leveraged" purchase and sale of precious metals.

How does this affect firms like Monex, which allow trading on 20% margin?



cloud9
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June 27, 2011, 05:38:51 PM
 #11

The law is simply preventing the "leveraged" purchase and sale of precious metals.




So you have a leveraged position by owning Citibank & Walmart stock options - both denominated in USD, you have a USD denominated bond leveraged because you only have a monthly downpayment based on the interest rate that may be hiked to protect a flailing USD.  But you can not leverage your hedge against a flailing USD?  It leaves you as average USD citizen pretty helpless in your current USD leveraged exposed position.

All leveraged trading on XAU/USD, XAG/USD, XAU/JPY or XAG/JPY is now criminalized for retail customer US citizens.

Disclaimer:  Postings of Cloud9 are only individual views of opinion and/or musings and/or hypothesisses.  On a non-authoritative, peer-to-peer public forum, you do not need permission from Cloud9 to derive your own conclusions or opinions, so please do.  Calculations and assumptions to be verified.
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June 27, 2011, 11:17:02 PM
 #12

The law is simply preventing the "leveraged" purchase and sale of precious metals.

So you have a leveraged position by owning Citibank & Walmart stock options - both denominated in USD, you have a USD denominated bond leveraged because you only have a monthly downpayment based on the interest rate that may be hiked to protect a flailing USD.  But you can not leverage your hedge against a flailing USD?  It leaves you as average USD citizen pretty helpless in your current USD leveraged exposed position.

All leveraged trading on XAU/USD, XAG/USD, XAU/JPY or XAG/JPY is now criminalized for retail customer US citizens.

You're right.  All leveraged trading should be outlawed, period.  That's why we're in this economic mess we're in.

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June 28, 2011, 07:07:08 AM
 #13

The law is simply preventing the "leveraged" purchase and sale of precious metals.

So you have a leveraged position by owning Citibank & Walmart stock options - both denominated in USD, you have a USD denominated bond leveraged because you only have a monthly downpayment based on the interest rate that may be hiked to protect a flailing USD.  But you can not leverage your hedge against a flailing USD?  It leaves you as average USD citizen pretty helpless in your current USD leveraged exposed position.

All leveraged trading on XAU/USD, XAG/USD, XAU/JPY or XAG/JPY is now criminalized for retail customer US citizens.

You're right.  All leveraged trading should be outlawed, period.  That's why we're in this economic mess we're in.

No, we're in this economic mess because it's reliant on a central organization in the first place, that can be hedged against.

In addition, the fact you believe man isn't entitled to trade his property as he pleases, disturbs me.
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June 28, 2011, 07:50:24 AM
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The law is simply preventing the "leveraged" purchase and sale of precious metals.

So you have a leveraged position by owning Citibank & Walmart stock options - both denominated in USD, you have a USD denominated bond leveraged because you only have a monthly downpayment based on the interest rate that may be hiked to protect a flailing USD.  But you can not leverage your hedge against a flailing USD?  It leaves you as average USD citizen pretty helpless in your current USD leveraged exposed position.

All leveraged trading on XAU/USD, XAG/USD, XAU/JPY or XAG/JPY is now criminalized for retail customer US citizens.

You're right.  All leveraged trading should be outlawed, period.  That's why we're in this economic mess we're in.

No, we're in this economic mess because it's reliant on a central organization in the first place, that can be hedged against.

In addition, the fact you believe man isn't entitled to trade his property as he pleases, disturbs me.
Typical statist.

The Fed artificially lowers interest rates so far low below what the market would dictate that you would be a fool not to leverage your investment since credit is so cheap.  Then suprise! everyone leverages up the hilt.  Now you need rules agains leveraging, because obviously it was a failure of the free market, not the Fed central planners. 

Then you get all these esoteric financial laws trying to fix the problems that the government created in the first place.  Of course, these laws never seem to work, because the market always finds a way around them.  Each year, new laws are created to further control the financial system.  Each time the politicians promise that the new law will fix all the problems forever.  Each time it fixes nothing, but makes things worse.

The one thing they won't ever do is shut down the Fed and the easy credit that makes all of this possible.  That would take away their sugar daddy that finances all their largess.

Without the Fed, people would have to actually save their money to create capital, and they would be way more cautious about how it was lent out.  Which means few investors would be lending money to subprime mortgages, leveraged trading, etc...
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June 28, 2011, 08:09:52 AM
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The law is simply preventing the "leveraged" purchase and sale of precious metals.

So you have a leveraged position by owning Citibank & Walmart stock options - both denominated in USD, you have a USD denominated bond leveraged because you only have a monthly downpayment based on the interest rate that may be hiked to protect a flailing USD.  But you can not leverage your hedge against a flailing USD?  It leaves you as average USD citizen pretty helpless in your current USD leveraged exposed position.

All leveraged trading on XAU/USD, XAG/USD, XAU/JPY or XAG/JPY is now criminalized for retail customer US citizens.

You're right.  All leveraged trading should be outlawed, period.  That's why we're in this economic mess we're in.

No, we're in this economic mess because it's reliant on a central organization in the first place, that can be hedged against.

In addition, the fact you believe man isn't entitled to trade his property as he pleases, disturbs me.

Isn't leveraged trading by definition trading of someone else's property that you have borrowed? Sure, we could say that banks and hedge funds may trade on leverage, and if they fail then so be it, they will pay the price. But I don't think it's that black and white when a failure by those entities can put most of the world into an economic recession.

For the record I think any institution that fails should be left to fail, because without that there is no incentive for institutions to act prudently. No bank is too big to fail, and no bank is so important that if it fails the country goes to shit. If banks exist that meet those criteria today, they should be dismantled immediately as threats to national security. BEFORE they fail again. They will fail again, because the same basic rules that caused them to fail before are still in place.
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June 28, 2011, 08:17:01 AM
 #16

Isn't leveraged trading by definition trading of someone else's property that you have borrowed?

Yes. It's also known as margin trading. This is not something that ordinary people do to protect their wealth from inflation or other economic chicanery on the part of central planners, government bureaucrats and other looters.

That said, while I strongly dislike the whole idea of borrowing other people's money (or property) to invest it, I even more strongly dislike the idea of being told that I'm not allowed to do it.

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June 28, 2011, 12:21:20 PM
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The financial collapse and ensuing recession from 2007-2009 can be blamed mostly due to deregulated markets being opened up in 2000 for the first time with the CFMA - fine libertarian incompetence at work!  http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

I'm glad to see that the government is starting to get tough on all of this wild forex garbage.
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June 28, 2011, 12:54:21 PM
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The financial collapse and ensuing recession from 2007-2009 can be blamed mostly due to deregulated markets being opened up in 2000 for the first time with the CFMA - fine libertarian incompetence at work!  http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

I'm glad to see that the government is starting to get tough on all of this wild forex garbage.
Please explain how this CFMA caused this recession and while you're at it, explain how you think outlawing "wild forex garbage" will help.

BTC accepted at my browser-based MMO, Minethings.com.  ~1500 active players mining now.
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June 28, 2011, 02:16:37 PM
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Is Hyperinflation imminent like in Weimar Germany?  http://www.shadowstats.com/

So, here's the plan: get a Dollar mortgage, pay off my current Euro mortgage, and wait for the US economy to give me a free house. How does that sound?
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June 28, 2011, 02:25:36 PM
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The financial collapse and ensuing recession from 2007-2009 can be blamed mostly due to deregulated markets being opened up in 2000 for the first time with the CFMA - fine libertarian incompetence at work!  http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

I'm glad to see that the government is starting to get tough on all of this wild forex garbage.
Please explain how this CFMA caused this recession and while you're at it, explain how you think outlawing "wild forex garbage" will help.

Yeah pretty ironic, considering the government has been very busy deregulating the markets for big players. Example: the derivatives market, which Alan Greenspan recommended needed no regulation.

The US housing market crash was made much worse by deregulation.

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