Monday, January 20, 2014

No more talk and lecturing. I'm using MMT to make money now. That's the best revenge!


It’s one thing to talk and lecture about MMT it’s another to practice it; to actually put it to work. Personally I am growing tired and frustrated of talking about MMT particularly when I watch the relentless push of all this destructive neoliberalism and the defective and poisonous neoclassical economics that underpins it.

When I think about MMT now I just want to make money with it. To me that’s the best revenge. Plus, how fun would it be to use something like a correct understanding of our monetary system to take money from the likes of Peter Schiff and Jim Rogers and Bill Gross and who knows, maybe even Pete Peterson himself? What a wonderful way to build your own bank account.

Who applies MMT?

Well, Warren Mosler applied it when he was a money manager and he made himself a fortune, along with his partners, one of whom just sold the Florida Panthers hockey team, which he owned, for $250 million. And Warren’s fund, Illinois Income Investors, never had a losing trade during Warren’s tenure there. So you see, MMT definitely has power.

But who is practicing MMT now? Who is applying it?

Me for one, that’s who. I have incorporated it into my own personal trading and I am teaching applied MMT in my Forex course. Read the testimonials if you haven’t already.

Let me give you an example of what I am talking about. Consider the following scenarios…

Scenario 1

The Fed announces that it is going to taper its bond purchases, so investors start buying the dollar and selling euros, yen and British Pounds on the belief that taper equals less “money printing” or, that it is a prelude to higher rates. In reality, however, fewer bond purchases mean those securities remain owned by the private sector earning interest, which the government pays and it’s interest that otherwise would have been removed. That means dollars become “easier to get,” therefore, the dollar rally fails and it reverses course and starts going down. MMT traders knew this would happen all along so they shorted the buck as it rallied and they cleaned up when it fell to new lows. Others didn’t see it so they lost. Boohoo for them.

That’s applied MMT.

Scenario 2

British Finance Minister, George Osborne, announces another round of austerity, even as the British economy struggles under already austere conditions. Traders pounce on the British pound, selling it for euro, yen and dollars thinking that it will mean a recession is coming. The reality, however, is that austerity means less deficit spending or perhaps even balanced budgets or surpluses, therefore, the net creation of British pounds is curtailed making the pound “harder to get.” Traders using applied MMT go long the pound while others sell. The pound’s slide is short-lived and soon it begins a long and powerful rally. MMT traders clean up. Wah wah, the others didn’t.

Scenario 3

The Fed announces another round of QE. Traders buy gold and sell the dollar believing that QE is “money printing” and it will lead to inflation or hyperinflation. MMTers on the other hand, understand that QE is just an asset swap: the Fed exchanges some stated quantity of government securities for an equal quantity of reserves. No net creation of dollars. Bingo! The MMT traders fade the dollar sellers and gold bugs and they come out looking rosy. Meanwhile, the dollar sellers and gold bugs just keep saying “There will be inflation, one day, you just wait and see.” MMTers laugh all the way to the bank.

These are just a few scenarios in which MMT can be applied. There are many more.

The fact is, I have been trading over 30 years as a member of four exchanges and as a floor trader and I literally see opportunities like this every single day where you can make money because market participants misread or misunderstand the true impact of policy changes or economic data on the markets. That’s because they are operating out of belief as opposed to true knowledge and fact. But as everyone should realize there  is a difference between belief and truth. If you don’t  realize that it will cost you money.

Let me state this very simply…if you know how people are likely to react based on their (false) beliefs and if you know how the monetary system really functions (truth) and if you can execute well and control your emotions then THERE IS NO REASON WHY YOU CAN’T BE LIKE MOSLER HIMSELF, MAKING WINNING TRADES ONE AFTER ANOTHER.

How do I know? Because I have been doing it! And I’ve been showing it to students in all of my classes over the past year. Never had a losing trade, there you go.

The course I’ve put together is truly a revolutionary course. It combines MMT with trade execution and personal mental “management.”Once you have this stuff down I can assure you, you will never look at trading and the markets again in the same way, ever.

Trading successfully is extremely hard for most people, almost impossible if not actually impossible. I know it was for me for a long, long, time. I was up and down and up so many times I can’t even count. Then I slowly learned how to control my emotions. That was huge because it was the reason for me sabotaging myself even though my analysis was good. You have to stop shooting yourself in the foot if you are trying to learn how to walk.

Then I learned how to read the market, I mean truly READ the market as in what other participants were doing: where they were positioned, what they were planning on doing at certain price levels, who was long, who was short, who was a strong hand, who was a weak hand, etc. When I learned to read the market and when I learned to understand its “composition,” that was like the difference between being blind and seeing in 16 million different colors. If you know who’s in trouble and who’s not, if you know who’s got a strong hand and who’s got a weak hand, you can literally use other people’s money to make money for yourself. That means you never have to put your own money at risk. How’s THAT for risk management!

Finally, after all of the above, I discovered MMT and that was the clincher.  MMT gave me the proper understanding of the monetary system, the economy, of policy and its effects on the markets. Before MMT I was just another Schiff. In fact I still have old tapes of me from my early days on Fox, circa 2000, 2001, when I was saying things like, “America is broke” and “We’re out of money” and “the Fed is printing money,” etc. Jim Rogers was my hero! Pathetic, I know.

Anyway, the rest is history as they say.

As for the course, some people ask me why do I teach? Well, for one thing it’s gratifying. I went through so many ups and downs and I know how frustrating it can be and I truly want to help people. The other thing is, I have found that teaching the course has made me a better trader. In fact, a MUCH better trader. Every time I give the course I learn something new, something that I did not know before. It’s one thing to be good at something, but it’s another thing to explain, in words, exactly what you do to be good. Putting it into words makes you delve deep down into the process and understand it on a level that is much more profound than when you’re just sitting there doing it alone, mechanically. It’s positively enlightening. I can honestly say I love it. I love teaching it.

I can say with the utmost confidence that the course will bring you to a level where trading becomes a controlled, predictable process with a positive outcome each and every time. You will see where making money becomes a matter of knowledge, self control and execution. You will understand, probably for the first time, that trading without losses is totally achievable as long as you have the right knowledge and the right methods. Warren Mosler did it. So can you.


To find out more about my course please go to www.pitbulleconomics.com. Or, feel free to email me at contrarianmedia@hotmail.com. Hope to see you in class.

17 comments:

Anonymous said...

How much of a stake do you need to play these markets?

Abram Larson said...

Mike I've wanted to take your course for a while now, but the time commitment and price range have thus far put it out of my reach. Have you considered writing a book or having a more compact (possibly weekend) session?

Michael Norman said...

Bill, whatever you can afford, but obviously the more you have the more you can make and then ultimately live off.

If you can start wtih $5,000, that's a good start.

Michael Norman said...

Abram,

I may do a book or a series of DVD's. However, the course is great because of the interaction.

Roger Erickson said...

Use MMT to make money?

I understand Schiff has already reported you to the Secret Service and IRS, for counterfeiting. He assumes you're going to "just print money?" :)

Michael Norman said...

"They're printing money!" LOL.

Anonymous said...

Thanks, Michael. I would have thought at least ten times as much. :)

Clonal said...

Mike,
How much of a time commitment is their when you are actively trading? How many times a day/week/month would you trade and how closely do you have to "watch" The $5000 pot you suggested sounds very hopeful.

The Rombach Report said...

Mike - This may be a dumb question, but do you have a fund that trades FX based on MMT fundamentals?

Tom Hickey said...

"Mike - This may be a dumb question, but do you have a fund that trades FX based on MMT fundamentals?"

If not, why not? :)

Vilhelmo De Okcidento said...

If anyone knows how to make money from no money, let me know.

If being rich meant having no money, I would be obscenely rich.

Tom Hickey said...

Use leverage, i.e., other people's money (OPM). There is plenty of money looking to make money. Lots of people get started putting deals together.

Another way is to sell stuff using other people's inventory "on memo." Another is acting as finder for a cut.

Creative types create salable items out of nothing and promote them. This works especially well with digital, which is almost costless. Even young kids have make a bundle this way.

Vilhelmo De Okcidento said...

Tom Hickey said - "Use leverage, i.e., other people's money (OPM). There is plenty of money looking to make money. Lots of people get started putting deals together."

Anyone who would let me anywhere near their money is even crazier than I am.

Tom Hickey said - "Creative types create salable items out of nothing and promote them. This works especially well with digital, which is almost costless. Even young kids have make a bundle this way."

Unfortunately, I am a horrible salesman. I'm too honest & nice.
I can't sell anything of bad or even mediocre quality. I can only sell something if I think it is an excellent product. It must be of such high quality that I can feel proud to sell such a product.
I am, however, an excellent wordsmith. I can make bad things sound good.
Maybe I could give advertising a try.
Wait...that's work.

On second thought, fraud sounds alot easier. :)

Michael Norman said...

@Clonal:

Sorry for getting back to you so late on this, but I will try to answer your questions.

Trading is work, particularly short term and swing trading, which is primarily what the course teaches. That does not mean you have to sit there glued to a screen 18 hours a day, however, depending on how your position is working you may need to check in every hour or so or at least every couple of hours. This would apply more to a situation where you are working out of a bad trade. I teach how you can pretty much work all trades to a break even in the worst case. My students have watched me do it many, many, times. In fact in one part of the course I ask for trades--totally unplanned and hopefully the worst trades they can think of--then I put them on and work them to a profit or worst case, break even.

Ideally, trades last a couple of minutes. I show you how to buy and sell at precise points. We frequently sell the highs and buy the lows. In those cases the trades goes immediately in your favor and you have 30, 40 pips profit.

On other occassions it could take a few days to a week to work out of a problem trade. It all depends. I currently have two trades on right now that I put on last week and I am still working out of them. (Close to breaking even on both now.)

I'd say I average something like 10 trades per month, maybe slightly more.

The important part is that I show you how trading is not "forecasting" and guessing. It's all about understanding what the market will do based on the composition of positions in the market. What are market participants doing, how are they positioned and what are their intentions. This info is all avaialble, but you have to know where to get it and how to use it.

-Mike

Michael Norman said...

In the beginning, with $5000, you should easily be able to double your money every year, up to a point. And that's with very low risk. After a certain level it's advisable to reduce risk even further, but hopefully by then even a 20% return will be significant.

Clonal said...

Thanks Mike,

That is really helpful

Tom Hickey said...

"I am, however, an excellent wordsmith."

If you can write, you can make money, but only if you know how to market what you produce and own. The hot field now is digital self-publishing, e.g, in Kindle mobi format through Amazon, iBooks through Apple, and epub format through several other venues like Smashwords.

https://www.smashwords.com/about/how_to_publish_on_smashwords

Kindle and Apple have free guides and apps.

However, I recommend checking out JutohJ, an application for generating ebooks in all formats easily. It's only about $40. The manual is free and goes through the process in detail. Download their free ebook, Creating Great Ebooks Using Jutoh

Alternatively, one can just pay a modest fee to a Word doc converted to various ebook formats and a cover designed.

This is a huge step forward in self-publishing.