Big Cats, Big Bucks! China and USA Talk on North Korea
Big investment banks and hedge funds employ a number of highly qualified analysts with years of experience. They conduct technical and fundamental analysis and look at the market from all angles.
But, expert analysis is not all that the big cats base their trading strategies on. They also get important information that not everyone has access to, or perhaps I should rather say, they buy it.
Don´t get me wrong, this is not confidential information like economic data which is leaked in advance so a handful of traders can take advantage thereof. This is political information on countries and economies.
That was the case with one of the big investment banks last year. They had a question and answer (Q&A) session with Hillary Clinton who was the Secretary of State back then. Not that it matters, but hey paid Clinton $650.000 for each of the 2 sessions, peanuts.
The gears are rolling on beneath the surface
When asked about North Korea, she said that the U.S. administration had an agreement with China regarding North Korea. Basically, without Chinese aid and trade (whatever the magnitude) North Korea would collapse in a matter of days.
So, China was going to take care of North Korea which means that they would stop them from developing their nuclear capacity further. You can never trust a lunatic regime like the one in North Korea but they can´t feed on grass, let alone developing nuclear weapons that can actually hurt someone, defence systems are all around North Korea.
What does it mean for forex traders?
It means that whenever we hear a threat from North Korea and the safe haven currencies rally, we must take it with a pinch of salt. According to this agreement, North Korea has nowhere to go, so every dip in the USD/JPY or USD/CHF on war threats is a good opportunity to buy.
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