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Found this in my box today ;)

If the music stopped ...


Volcker Says Inflation May Accelerate, Become Harder to Contain

By Scott Lanman

Oct. 17 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker, who put an end to spiraling prices after taking office in 1979, said he's concerned U.S. inflation may quicken faster than the central bank can control it.

"I don't think it's impossible that it will build up a little momentum,'' Volcker said in an interview with Charlie Rose aired last night on the Public Broadcasting Service. "We're not on the verge of a great big inflation; I just don't want to see it build the momentum that makes it harder and harder to control over time.''

Volcker, echoing comments he made last month, stopped short of critiquing specific actions by current Fed Chairman Ben S. Bernanke, who took the central bank's helm in February and led the decision to August to end a two-year run of interest-rate increases. Bernanke and other Fed officials say they expect inflation to decline because of a slower economy and a drop in fuel prices.

"I am a little concerned that there's a little too much tendency to say it's under control,'' Volcker, speaking about inflation, told Rose in the interview, taped Oct. 13. "It's not out of control, but it's been rising, and, you know, you have to worry about that.''

Volcker, 79, had said Sept. 25 at a New York discussion that the inflation rate "is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word -- psychological pressure, political pressure -- there is not to do anything about it.''

'Reach Your Conclusions'

Asked by Rose on the program if Volcker was saying inflation may not be "under control,'' he responded, "I'll let you reach your conclusions.''

Bernanke, 52, is a "very able economist,'' said Volcker, the central bank's chief until then-President Ronald Reagan appointed Alan Greenspan in 1987. "He's doing a very able job. So far, things have been reasonably calm.''

The central bank's preferred inflation measure has been running above the
comfort level specified by Bernanke and other Fed officials for more than two years, though it's less than one-third the average level from Volcker's first couple years in office.

According to minutes of the Fed's Sept. 20 meeting, members saw a "substantial risk'' that inflation may not recede as they expect.

"It's quite evident that in their debates, in internal debates, the kind of inflation risk that I have mentioned is very apparent in those discussions,'' Volcker said. "They have balancing considerations, but you're not going to get me to try to steer monetary policy when I haven't been there for 20 years,'' he said, laughing.

The world economy is doing "miraculously well,'' Volcker said, describing it that way "because there are some big imbalances underneath all of this,'' especially the flow of capital into the U.S.

"If the music stopped or slowed down a bit in terms of the foreign money coming in, you've got a potential problem'' for the dollar and inflation, Volcker said.

Possoble break higher for Cable today if it can get over. 1.8710-15 area

Well I'm long since yesterday. Some commentary suggesting the Philly fed will be bullish for the $ so we'll have to w&s.

hey your going the wrong way

I'm still long from last week and staying that way for the time being. My hourlies have been a bit wobbly, but I'm drawing some comfort from my dealer charts which are still pointing towards more to come.

1.8740 seems to be a bit of a hurdle though, but equally 1.8660 seems to offer good support. If that latter level goes, I'm pretty sure that I'll look for an out.

My stop just below 660 as well. Hope it goes the right way.

I think this is the longest I've held and Fx position without getting tempted to close or getting stopped out. Still very much an apprentice ;-)

I've got a jar of special Chill Pills that I can recommend if you need them, Seymour. I bought them in a bar in Marrakech.

:o)

Starting to sound like the Dutch Coffee House! I'll give you a shout if I need them Hils ;-)

Chilling to Morph the Cat here :)

I thought he was better in Oliver, Choccie?

Nah, Hils - thought he was a bit moody in that

... blame it all on Bart Simpson ;)

1.8740 could be tested soon...

I am long cable and euro/usd


Hils trader/dealer charts...4 hourly?

That's right, D. Not sure why they call it the dealer chart although I could probably guess. Perhaps somebody here might be able to shed some light on it.

so far so good...
resisting the temptation to move my stop up yet though..

My end of day look. Pleased to see that all is right in the Fx world:-) Same thoughts as you Foale, VERY tempted to move my stop up again.

Have been chilling to "Paranoid Android" in my head whilst I work. Nothing to do with the nature of the work you understand.

Just done a fibbonacci thing from the bottom on 15th Oct, to the high of 1.9050 and this goves interim targets of 1.8790, 1.8850, 1.8930 then the 1.9050

I'm happy to stay long all the time it's in that channel, Seymour. It took a bit of time to develop and find the support just above 1.85, but it now looks to be clearly defined and isn't rising too steeply, so I'm comfortable with that.

I shalln't be around much over the next week or so, so I'll just adjust my stops each morning and evening and leave it at that.

closed my euro/usd long at the top of recent rally
Pleased with my exit...

added to my Cable long on that dip....

well the top of that channel would be a nice close...
if we can get over 1.8800 that is....

reduced position size slightly at 1. 8824 top of SC's channel