QUESTION: Numerous people have asked:

Does the FED actually also see these trends coming (strong US dollar, bond crash) ?
K.

ANSWER: Yes. The Fed has sent people to the major banking houses and told them outright that their models are wrong. They have been telling them quietly that there may not be a rush to quality being bonds. Moreover, the selling of US Treasuries by some central banks has been an effort to try to prevent the dollar from rising. China’s holding of US Treasuries has declined to its lowest level in several years, but it is having little effect causing markets to simply coil.

QUESTION: Marty; You said at the Berlin Conference that failure is not the opposite of success. It is part of success. I found this intriguing. Is this part of the training sessions for this year’s WEC?

ANSWER: Yes. The way we learn is by making mistakes. If you claim to have never been wrong, then you have never learned anything. Mistakes are part of life as they are in trading. The trick is to survive your mistakes to make it to the next round. There is no such thing as failure — only learning lessons. This is why I also say we must crash and burn. It is impossible to argue to governments that they will fail as long as they have the power to try to defend themselves. Only a crash and burn provides an opportunity for change to emerge. This applies in politics as well as trading.