 Right brilliant guys so lots of I guess fundamentals to go through and I do want to just cover us a few things. If anyone's got any questions definitely remind me about those questions but but I do want to just I guess get through and kind of maybe just cut through the noise and reinforce some concepts in this in this week's webinar so one of the things I guess that should if you don't know already or maybe should be reminded is that not all risk events are the same right so at the moment currently we are from a risk off perspective we all obviously will understand that there's you know the Russian invasion of the Ukraine and there's a lot of discussion about you know what may happen what you know may not happen you know the fact is nobody knows right everybody is is pretty much you know speculating but in trading in a risk off environment and when there are lots of risk off sentiment it can be quite tricky and challenging confusing. A lot of you know traders are like well what should I do right what should I should I should I stay in the market should I you know what pair should I trade etc etc. Now, you know, me personally again just to reiterate this I've gone over this many times but personally, you know, I will still continue to buy risk off, sorry risk on currencies even in a risk off scenario, because for several reasons and one, you know, real reason being is that you, you always get pullbacks for Godless right, you will always get pullbacks in a risk on scenario or risk off scenario right of course, you know, the market and price can't move higher, you know, or lower forever there's always going to be a pause at some point. Again, I get it prices can drop for a very long time right they can do. And so there are things that we have to do to mitigate, you know, those risks. Yeah, for example, just risking less, you know, position sizes, etc. really just taking the A1 setups. But there's also a difference as well what I wanted to move on to really is is cover is there is a difference in risk events that we must be aware of you treat every single risk event with the same, you know, broad strokes basically you can't just say all right well it's risk officer this is what should happen. No, that's not the way it works. Every risk event is different. And you need to be aware I guess and no one knows no one's got crystal ball but of the resolution timelines right or potential timelines or possible timelines right. And each one is different they are they they all look similar but they are different right so as an example as an example right. We today we've got and it's point in time you know 2022 you know first of March or there's the second of March today the second of March today. One second. Yeah. But at this point in time where where you know we've got the Ukraine war. Right and Russia doing what they're doing. Now, again, nobody knows no one knows when that may end. Okay, you know that they're a speculation and this is from, you know, MUFG, and they say the reality is now the reality now is for global investors to consider two basic scenarios from here, a conflict that is contained within the borders of the Ukraine between Russia and Ukraine or a more significant conflict that draws NATO or other countries bordering Russia. While we cannot dismiss completely the risk of the conflict drawing in NATO or other countries in the region we currently assume this will be contained to Russia and sorry contained to Russia Ukraine in the Ukraine. Yeah. Now this is where the timeline horizon comes in right so they've already done their assessment and how what what impacts it's going to is it going to spread or is it going to be contained yeah contained within Ukraine. If so, right if it is contained within Ukraine then there are two sub scenarios. Yeah, a brief conflict or one that is long drawn out. Yeah, that's pretty much, you know, what we need to understand with every single risk event that happens now. Of course, nobody knows with war but let's say for example let's look at elections right elections generally have a deadline. Yeah. So, the deadline is pretty much you'll know by then or in lead up who is you know which party is probably leading. Of course they are obviously going to be surprises or they can be surprises as to, you know what the outcome of those elections are but generally you have, you know, a timeline. With some risk events you do some risk events you don't so you have to treat every risk event. Yeah, differently some maybe you know this this might be a brief conflict, or one that is long drawn out. If it starts to look like it's a brief conflict and again no one knows right then you, you know adjust accordingly right if it looks like things are escalating even more. And let's say for example surrounding countries start to get involved and you know NATO get involved then it'll probably start to look like a more drawn out a longer risk off event. And the, you know, the light at the end of the tunnel will guess the resolution is probably being kicked further and further down the road right. So, there are, you have to understand this factor you can't just blindly there's a bit more in depth analysis that needs to be taken when looking at every single risk off event. Yeah, because if you if you don't and you just saying well I'm if the war is on and I'm going to you know try to start trading the war, you could be caught off site. Yeah, you could be caught severely off site. So, just, and also as well I guess one of the things that you that I guess to cut kind of cut through the noise as well is is try to focus on what the facts are. And even in that there's obviously lots of facts right which facts do you focus on me personally I try not to speculate on you know what is going to happen in the future, all I'm looking for is clues as to whether things are getting better or worse. Yeah, so there was a situation I think it was yesterday or the day before, where I think it might have been yesterday where I was watching the news, and on one hand, they were talking about I think it might have been yesterday where they you know the Ukraine and you know Russia had literally had talks right, they were having talks it was that yesterday by the way guys. Was that yesterday or was it the day before something to get my days all mixed up, where they sat down at the table but at the same time. Yeah, there was you know bombings that were going on and attacks that were going on right so it was it was. Yeah, yesterday, I feel it's pretty was yesterday and potentially today to write so there were constant talks going on yesterday morning, I knew it was yesterday morning. Right, so there were talks going on, but the news was still reporting you know seeing you know explosions and you know and things like that going on. Now, what do you focus on in that scenario, literally within the space of like 10 minutes, you know it was like one report was saying same channel and everything one report was saying, they're coming together they're sitting at the table there are talks going on. Yeah, the next literally next, you know segment of it was, you know, this is a bit they were showing a building and in the building got blown up and da da da da da da, right. And I get the emotional reaction to it but what I'm focusing on is the actual resolution the fact that there are talks, that's what is important. Yeah, and I'm not saying that. I'm not talking about important for our trades right I'm not and our decision making. I'm not talking I'm not saying that it's not important that you know people aren't dying because the real people dying is a very very sad, horrible, frightening situation for anybody to be in because you're trading these things. Yeah, that the market is is going to react to whether there is a resolution this is why my default position is always resolution resolution is it coming sooner or is it coming later. Yeah, we can go back to for example the virus pandemic and people always ask the question and I even I got caught out in this one myself right so so in 2020, when you had for example the Aussie yen right Aussie yen. Yeah, you know that for about two three weeks, you saw a really a massive drop. Yeah, in the Aussie and then for pretty much the rest of the year you saw the Aussie and do this. And the reason why the trade idea wasn't it wasn't that the market was ignoring risk off because you know that there was no buy you know this was I think maybe March, April I think it must have. It must have started to reverse. Yeah, around April times. And even when we were going into July, August, September, October, the idea that the trade idea the reason why the market was pricing in a, I guess, buying the Australian dollar because Australia Australian economy and the Australian government were the best out of the worst right they were handling the virus the best so they were going to be close to recovery right. They were going to be the ones that were going to recover the quickest right so the light at the end of the tunnel right the timeline, the market focuses on the timelines to resolutions, yeah the resolution timeline. So that's really what you want to focus on. I get it. I know that you know you're seeing if you're on social media you're seeing, you know, bombs and people dying and blood and people literally being and pleading with the Russian government stop popping. I get it the emotional response to that. But that is not what is going to influence your trade. What is going to influence your trade and your trading decisions is where is the when is the resolution coming is it likely to be sooner rather than later or are they sit at the table or are Russia refusing to sit at the table, you know, are you cranes refusing to sit at the table. You know I mean, and is no there's no negotiation inside. When you start seeing that that's when you start to see more risk of start to come into play. Yeah, and it could be again a long one that is, you know, drawn out. Yeah, does everyone understand that and that's the same thing you apply that logic to pretty much every single scenario right when when the when the when the when the vaccine when it was a vaccine for for for coronavirus right when when I think it was Pfizer and Madonna, no we're releasing their vaccine doesn't mean that it had a cure, but the fact that the market took that as again light at the end of the tunnel. What did you see people were still dying of COVID right we were heading into our you know the first winter after you know the first winter of COVID, you know I mean but yet the market was still going higher. So it's all about light at the end of the tunnel the resolution. Yeah, that's how to play and I hope that does, you know, let's really clear things up because it's never necessarily you know 100% clear but as far as from a perspective on how I kind of look at and how I've come to trade risk of events right and risk of scenarios. Yeah, also as well you will have a situation where and situations where for any of you who, you know understand buying or purchasing the market make a course you understand that there has to be liquidity has to be provided so you just just just by default, you will have, you know, I mean, pullbacks that's the reason why because the market makers have to provide, you know that liquidity for for institutions. So, so yeah so with that being said, understand the resolution timelines resolution timelines. The next thing I want to talk about right and this is going to get you guys interacting and interactive I guess is understanding the interest rate inflation and GDP balance that central bankers have to consider yeah so we tend to put ourselves or you know, and I used to do this as well is put ourselves in a situation where it's like you're thinking about what they would do. And what you really want to do if you understand the rules to the game is understand what would I do if I was a central banker. Yeah, if I was a central banker in this scenario. What would I do or have to do with monetary policy. Yeah, because if you understand what you would do then you're likely to understand what they are likely to do. I'm not saying that you're going to be 100% right all the time but you're more often they're not going to be on the right path. So at the moment, you know, Russia invasion divides traders on and that's the word stagflation right. Can anyone tell me what stagflation means. If you want to turn your mic on or type it in, whatever's easiest stagflation, what is stagflation. Yes, hello. Yes, it's when we are in our inflation has reached way above its levels, but we are also in a state where our GDP cannot reach the potential. It's good. It's a low GDP. We have we have a one low GDP and we have a next quarterly low GDP. Unemployment also is very bad is going to a lower unemployment is going higher. More people been unemployed, which means that the bank is a very difficult position. I don't know what to do are the rise rates, because due to inflation, but also if they're in trouble because I do rise rates is going to push more hard onto the, onto the people and the companies and it won't be easy for the economy to adjust to the new change. Right. Excellent. And that's pretty spot on. Right. You're pretty much spot on. Right. And Ken says high inflation, low GDP. Gary says same thing, shrinking GDP and high inflation. Absolutely. Yeah. And so what we have to do is understand the dilemma of the bank. Yeah. And the or not even the dilemma of the bank. I'm going to put it as the dilemma that you have. Right. Because you are a central banker. Right. Your task is to see the economy. Yeah. Through this crisis. Yeah. Now, the problem. If you have high inflation. Yeah, high inflation, meaning you've got a 2% target. By the way, I'm going to walk through. I know I know you guys know this, but just for anyone who maybe might be unsure about the dilemma that the central bankers actually have at the moment. Yeah. And I know. Alexander says as explained it, but we're going to we're really going to walk us through. Yeah. So inflation. Right. Is high. Right. Is above the 2% target. So what do the central bankers typically have to do. And by the way, it's trending away. Yeah. So it's going higher. It's trending away from their 2% target. Yeah. So what do central bankers typically have to do in order to and I want everybody to interact. Welcome F green. Fidel. How you doing. I want everybody to interact. Yeah. Yep. Okay. Everyone's in hike, hike, hike, hike. Excellent. Right. So they typically have to to high crates. Right. Now, if you hike rates. Yeah. Yeah. If you're if you're hiking rates, you have to be aware of, you know, gross domestic product GDP. Now, what do we need to see from GDP in order to high crates? Smith, Ken Smith says rising growth up. Yeah, however you describe it. Right. Exactly. It's got to be it's got to be growing. Yeah. It's growing. Right. Excellent. In order to high crates, in order to high crates, right. So rates, rates is up. No. Excellent. All the boxes are ticked. Now, if we hike rates. Yeah. Let me continue to hike rates. What is the effect of two high rates? Or if rates go too high on the economy? What what could the possible effects of hiking interest rates too much have on the economy? Mm hmm. Alexander just says higher borrowing. Ken says hurts economy, higher paycheck rates makes the currency too expensive. Some good answers. Anyone else? Marianne, Justin, Fidel, anyone else? Anyone else? I want everyone to get this. I don't know. Maybe some people might be at work or listening or whatever it is. So again, it's all of those things. Right. So if rates are too high, it generally can hurt an economy because of borrowing and lending costs. Right. So from the perspective of, you know, just just think again, think about ourselves right now. Imagine if interest rates were at, let's say, for example, just just do an extreme number. Let's say, for example, interest rates will currently act 10. No, just do 20%. Right. If interest rates are at 20%. How does that affect you? Yeah. And your and your spending habits against his yikes. Right. But just let's imagine the extreme, right? Because we have to imagine the extreme in order to understand the the the issue here or the potential issue. Right. You know, I mean, well, yeah, I mean, that's that's more to do with inflation, right? You know, I mean, $9 low for bread. But from a from a from a if interest rates, if interest rates right now are at 20%. Yeah. If you're a mortgage owner. Right. If you've got a mortgage on your property or if you invest in properties, multiple properties. What is that going to do? That the exactly people know this right. So I'll spell out right. It's it's it's the cost of borrowing increases. It literally hurts businesses. It hurts business because everything is expensive bankruptcy. Justin says exactly will cause eventually will cause that because people can't afford to pay back 20% interest rate right from a from a lending from a borrowing perspective. Imagine to borrow. You know, you needed to grow as a business. Yeah. And you're like, I can't need to I need to borrow as a business. And we need to expand. Because if you don't expand, then we're probably not going to survive the next, you know, year or two. All right, I want to go and borrow some money. And the bank tells you, well, yeah, you can take out a loan, but it's going to be 20%. You know, I mean, like, how do how does an economy survive? Right. How does an economy survive. So if you hike rates too much. Yeah, interest rates are too high. It hurts an economy and Gary also said as well, which is important to remember is that it obviously creates demand for an economy or for the territory for the country. Yeah, for the country's currency, I should say. And if there is if the currency is too expensive, it also makes them less competitive because again, if the country of Leon and the country of Gary and the country of Ken and the country of Justin, yeah, are all selling the same products, we're all selling the same products, we're all exporting the same product, right? But Justin's, you know, country is exporting it for cheaper than everybody else. And let's say, for example, my country is the most expensive. Where do you think Gary and, and, and Ken are going to be buying their, their products from me or Justin. Justin is a cheap one. I'm the expensive one, expensive exchange rate. Who's going to, who's going to, who's going to be the one. That's exactly you're going to go to Justin. That's exactly it. Right. And that's how it works. So then there's, so then what happens is, is that the knock on effect is I'm going to sell less because Justin is undercutting me. He's getting all the business. I'm not getting much business, which then affects my exports, which then affects my GDP, right. That's, that's basically how it goes. Yeah. So, so, so making interest, interest rates expensive, or two or hike interest rates too much has the effect, or can have the effect in the extreme example, right. And not even necessarily even extreme, but, you know, central bankers don't know what number that is. Right. They're constantly trying to balance. So they hike, and then they kind of maybe wait and see or they forecast to see how much, you know, interest rates they can hike. Let's say for example, in, you know, by the end of this year, can the economy cope with a, you know, a 2%, you know, if interest rates at 2%, can the economy cope with that.