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The individual possessing this talent is normally unaware of the thought processes involved and ascribes their
results to intuition. Depending upon the lifelong personality of the individual, the innate level of that
talent and the discipline that he has exerted in training it, the reliability of an individual's intuition
varies from zero to perfection. As is the case with a computer, GIGO applies. In order for the pattern
recognizing capability of his brain to be effective in the solution of physical problems it is
necessary for an individual to have accepted a certain set of learning rules for himself. These rules
are:

• Everything he accepts as true must agree with everything else that he accepts as true.

o In the event of contradiction, the validity of the relevant information, both old and new,
must be considered to be tentative.

o If the information is more than trivially important, the necessary effort must be made to
resolve any inconsistencies by correcting the new and/or the old information.

o The more items of information processed in this manner, the closer one's store of
knowledge will approach absolute validity. (It will never be perfect, no one lives that
long.)

• One must never assume that his source of information, no matter how revered, is correct.

o Where necessary in an academic or business situation, one must keep two sets of
books. One set of books must contain the information expected by the individuals
possessing power over your future and the other set must contain the information you
have determined to be true.

• One must never allow himself to be brainwashed or bullied into not following the preceding
rules.

If an individual follows these rules from an early age, he will find that his intuition, also known as
common sense, will be extremely reliable and will provide him with information long before he
understands it consciously. As a bonus, the information will be correctly labeled as to its reliability.
Intuition only yields faulty results if an individual has failed to adequately follow the rules described
above.

16.8- Is the information presented in this book more nearly correct than presently accepted
concepts? The author believes that it is for the simple reason that he can find no contradiction
between the various items of information involved. On the other hand, the presently accepted
concepts are severely inconsistent. They are as full of holes as lacy swiss cheese. Will the material
that the author has provided require improvement and correction? Certainly it will, no one can
cover this much material without error. As to where our understanding of reality will lead, only time
will tell. Unfortunately the author's age insures that he will not be around to see the results.

16.9- Common Sense is another name for intelligence. While mathematics and experimentation
require intelligence for their development, their usage does not directly involve intelligence. In their
application, they are merely tools which must be used as an adjunct to intelligence.

By Marc Chandler of Marc to Market

Tuesday, July 19, 2016 5:27 PM EDT

Our underlying constructive outlook for the US dollar remains intact. It is broadly based on the divergence between the US and most other major economies. The US acted early and aggressively to counter the Great Financial Crisis. Unorthodox policies, such as quantitative easing, were adopted years before the ECB and BOJ. This has produced different outcomes. US economic growth may not be impressive by pre-crisis standards, but it does not seem particularly fragile.

The Federal Reserve may be normalizing monetary policy more gradually than we anticipated, but the ECB and BOJ are more aggressive. Although there was a scare around the UK referendum, the derivatives markets clearly show that the next Fed move is a hike, not a cut. Many observers expect the ECB to ease by changing from the capital key to a debt market measure to guide its sovereign bond purchases. This would reduce the quality of assets being bought, which some economists regard as more aggressive policy. Many also expect that the ECB will announce in Q4 that it will extend its purchases, which have a soft end-date of the end of Q1 17, after having been extended once already.

The BOJ is expected to ease policy as early as next week. It may be part of a larger fiscal-monetary initiative to strengthen the economy and arrest falling prices. The Bank of England gave as clear a signal as can be reasonably expected that it will ease monetary policy next month. Australia and New Zealand may cut rates next month as well.

At the same time, the US economy appears to have accelerated in June, and that momentum should carry into Q3. The service sector ISM was the best of the year. Jobs recovered from May's fluke. Manufacturing and industrial output strengthen. Retail sales were stronger than expected, and price pressures were slightly firmer.

The Dollar Index is not a good proxy for a trade-weighted index. Two of the US largest trade partners, Mexico and China, for example, are not included. However, for a rough and ready proxy, the Dollar Index may be useful. After trading broadly sideways in in H2 13 and H1 14, the Dollar Index rally from around 80 in mid-2014 to 100.50 by the end of Q1 15.

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Marc Chandler

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Marc Chandler has been covering the global capital markets in one fashion or another for more than 25 years, working at economic consulting firms and global investment banks.

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