This page has been archived and commenting is disabled.
Jim Grant Explains Why QE3 Is Coming
Once again we are reminded why we like Jim Grant so much. From his latest Grant's Interest Rate Observer (which, trust us, is worth the subscription): "Almost 30% of the respondents to a poll conducted by UBS a few weeks back said they anticipate a third round of so-called quantitative easing... We count ourselves among the expectant 30%. To its congressional directed dual mandate the Bernanke Fed has unilaterally added a third. It has undertaken to make the markets rise. The chairman himself has more than once taken credit for the post-2008 bull market (on one such occasion in January, he reminded the CNBC audience how far the Russell 2000 had come under Fed ministrations). Could he therefore stand idly by in the face of a new bear market. Byron Wien, vice chairman of Blackstone Advisory Services, went on record the other day predicting a summer swoon in stocks following the scheduled winding down of QE2 in June. Let us say that Wien is right, and that, furthermore, drooping stocks are accompanied by sagging house prices and a weakening labor market. Bernanke was hard put to explain why he chose to let Lehman go while acting to save Bear Stearns. He would be harder put to explain why he chose to implement QE1 and QE2 but, in another hour of need, refused to launch QE3." And "Sooner or later, gravity turns speculative markets into investment markets. When this transformation occurs, the Fed will confront the need to bail out the innocents it had previously bailed in. Hence, QE3." And therein lies the rub. Simple, sweet, and, for the US dollar, suicidal.
»
- 32170 reads
- Printer-friendly version
- Send to friend
- advertisements -
At one point Team Tyler did not like JG. It was not that long ago. It's wonderful how quickly relationships mend on Wall St.
http://www.zerohedge.com/article/rosie-debunks-jim-grant-rosyness
Tyler said he's drinking Kool-aid,
and Jim said no, nooo, no.
~D'jean Splicer
If you read that post it looks like Rosie who said JG was drinking the Kook Aid, not TD.
I think we can all agree that Rosie was dead wrong on the impact on the stock market of massive monetary stimulus.
I must admit it is vague at best when presented your way, unless you have access to the Rosie article. Which you probably do so I stand corrected.
The segue from TD's into Rosie's article was the gray area for me. That was back when Meredith was transitioning also.
++ on Rosie.
I too, wish the transitions well better marked, as I've had a couple of WTF moments, only to realize it isn't Tyler after going back to the beginning.
Tyler, <hr> is your friend.
I was secretly hoping for a tearful reunion ala 'Undercover Boss' where Tyler would start crying and JG would start crying and a shill or two would start crying...
All in the name of increased revenue from the sympathy shopper.
Oh well.
Lots of newsletter writers auditioning here.. what was once a good financial site has become a Newsletter Bazaar of sorts.
Step right up.. step right up..cmon folks.
And your assumption is that newsletter content is bad and should therefore never be referenced, and/or that Jim Grant who, along with 13D, is the author of one of the two most famous, insightful and long-running newsletters in finance, needs to audition on Zero Hedge? Should we also never reference sellside research because it is evil and conflicted, or mainstream media (you know Bloomberg and Reuters) because the banks pay their ads? Yes, we can already see the half a post a day that would result.
You are welcome to skip any and all posts that have references to external content. Alternatively we would be delighted to refund your subscription
Now that is +slam with class!
+2 I think I'll make the lady a slammer tonight on that one. You got to love it. Way to go Tyler.
Rule #1 ZH Rules. Best site ever.
How could anyone diss Grant?
He sits on the right hand of god, Richard Russell.
gittin little carried away lololol.
LMAO!!
Finally, a way to make money off the sainted INTERNET! ZH earns the GHKSOA and BBB AAA Customer Service Rating. UL approval pending.
Q1. Can we double dip by asking for multiple refunds?
nice retort tyler lololol
Withering. Truthful. Deserving.
Ha Ha...and reminds me of Marla.
My first double post!
If I may suggest that QE3+infinity might be on that list of questions you are making to BB-brains. I am totally confused.
It's an interesting, if not depressing, topic. Once you think you have something within your grasp many, many people with different perspectives shed new light.
LOL
Thread over! A winner is you.
Getting good , accurate financial information is almost impossible in the MSM. Without places like ZH and subscription newsletters, an investor has almost no chance of learning the truth. Any recommendation from Tyler is considered rock solid by this ZH reader. Yours, Maverick
Spoken in true Fight Club Spirit !
Question Tyler; was Mark Pittman the first Tyler Durden and did his daughter just recant her story about his murder / death?
$2 Trillion We Never Knew We Had And They Won't Tell Us Where It Went
Grants Interest Rate Observer was always revered on bond trading desks and in the T Bond futures trading pit at the CBOT you were correct to slam the critics.
How do when we know it's alright to start shooting zombies?
Isn't the rule that you have to sacrifice one limb before it is moral?
When they cue the scary music
Shot when you think they are close enough.
Otherwise it's too late.
The superior survival tactic is to not let them or any other threat force get too close to be effective: keep them off at safe distance with preemptive fire "for effect".
"He would be harder put to explain why he chose to implement QE1 and QE2 but, in another hour of need, refused to launch QE3."
--or maybe everyone will finally realize that QE didn't do anything except keep the same old game going. If markets between begin to swoon, it will confirm that QE isn't doing anything for the real economy.
This didn't deserve a junk. I don't think they would learn the lesson, but there isn't anything wrong with hoping it might take.
Will there be an engineered siesta between jawboning there will be no QE3, a market and commodities crash and the beginning of QE3 justified by everything coming apart like a soup sandwich?
No explanation is needed.
Did congress balance our budget today?
If not, then will China and Japan purchase $1.6 Trillion in US T-bills over the next year?
Yeah, we didnt think so.
www.silverdoctors.com
Why the incessant need for strict balance? Why can't the Treasury just hang loose for a while? Play it by ear, no rules.
What's your problem, man?
Jim Sinclair sums it all up with a single sentence: " If QE, aka the “non-economic purchase of US Treasury bonds” ends, who will buy the bonds required to finance the deficit? Apparently not China."
Jim Rickards also has said how a stealth QE will be done. In any case they either do a QE 3 or let the system emplode .., either way PM's do well. They may go along with the ' conservatives' and let the public get what they only think they want, and then only have to await until the people themselves cry for more QE.....to infinity.
There is no longer a strong producing economy , or industrial base like 40 years ago, to become conservatives. Sooner or later Gold and the dollar will have to be fixed at the hip.
That is a good point. So you think a Japan style stop to QE is out because we have a minimal industrial base?
QE should include large sums for R&D, along with heavy tariffs. We can't afford anything less.
Is this possible
http://www.readtheticker.com/Admin/BlogAdminView.aspx?65tf=191_can-you-make-me-rich-by-christmas-2011-04
Yes it is.
Members Please Logon:
Ive been saying the same thing for months. We got a deflationary scare coming, and no immediate qe3 at the end of qe2. Continued inflation is not your biggest worry this summer. The risk off trade is coming back
I am counting on several years of such swings to make money in a low return market.
Grant must be one of my subscribers.
Maybe they read Bruce Krasting's (I think) assertation that QE has caused interest rates to rise.
They have a few balls in the air: Equities, Rolling cheap Govt Debt to enable Govt Spending and keep the banks afloat, the Dollar, commodities, full-employment and inflation (ok last two.. well....)
If this is the crossroads, which do they let go first? Maybe no QE, equities crash, they cross their fingers treasuries and dollars get the flight-to-safety bid, we all beg them for more QE, then they start bleeding the dollar again from a higher level with more wiggle room to the upside on interest rates.
Just spitballin here. Havent thought through the effects on Yuan etc.
Oh by the way. Does everyone remember their predictions of treasury rates upon termination of qe2?
I do! That was a junkfest flamewar for the history books.
I still maintain no significant change although japans black swan might decrease their ability to purchase treasurys in expected quantities.
Whether or not they annouce QE3, it is coming.
http://silverliberationarmy.blogspot.com/
The economy is picking up? How much robust business can a 98 year-old hooker bring in?
it would help if she has parkinsons!
That's not even remotely funny shit for brains.
Parkinson's is slowly, cruelly killing my dad.
Punch yourself in that face and I'll take credit for it. I hit very hard.
Fuck you.
dup
You are one sick puppy.
kinda like an epileptic whore?
<automatic replicator *on*>
It is not picking up fast enough.
Hence brief correction at end of qe2
I do mean real correction, not these recent girly-man corrections.
One thing that is confusing people, I think, is the disconnect (or evolution) of the multinational corporation. Most of the big corps in the U.S. are no longer really "U.S." companies. They do more and more business, manufacturing, and storing of profits elsewhere in the world/overseas. Stocks CAN continue to do well in the face of a deteriorating U.S. Yes, the U.S. is still the world's largest economy and market, but it is declining fast. Don't let traditional domestic economic markers for the U.S. color your projections of stock movements as much as in the past. CAT, PG, etc CAN still do well even as the U.S. ponzi collapses. Well, I suppose if the U.S. ponzi crashes the rest of the world along with it, then, well, more bread and bullets.
+ Most excellent post.
ZIRP has been the stimulant for MNC expansion outside the developing world. Hard to say if some of these emerging world projects would be profitable without this cheap capital.
I think you could safely say the answer is no.
I think we may safely assume that with any major haircut to multinational revenue/profits from the recession-wrecked USA, their breakeven point will rise to a level where "overseas" sales volume will not overcome or recoup the domestic shortfall. With no earnings, there is no dividend or meaningful P/E ratio. Equities tank very hard in that scenario.
There's a phenomenon out there I am wondering about. The US economy was 50% of the world in 1950. When others rise you shrink relatively to the world. The EU is shrinking but the US is relatively stable at 25%. This must be a massive fraud. When the 30,000+ billion credit bubble is removed watch the % falling fast. The US of today really is a debt illusion. A tyrant in its last breath. To finance all the private and public debt the US is spending trillions. Printing must go on or doom. And it is going worse. Bernanke and the US government want you to take more debt. This is a nightmare.
Every other country that is buying our debt is also printing money too, so were "all in this together." Given this fact, that percentage is probably close.
I suspect "percentage by weight" and "percentage by volume" measurements would be vastly different.
During QE1, ten year rate goes above 3.9% twice, kissing 4% once, just as QE1 ends.
In the six month pause between QE1 ending and QE 2 beginning, rates go nearly straight down to 2.4%
Once QE2 begins, ten year rates start climbing again, but during QE2 rates don't go above 3.8%. We've yet to see a break in the trendline for the 30 yr bull market in T's.
I'm guessing we see risk off come July.
Though Bill Gross is all cash... <pauses for thought>
Yeah a little odd for a bond fund.
And the US Airforce can't find any bolds and nuts Made in America.
I've read and watched Jim Grant for 30 years. He is the most knowledgeable and eloquent Fed observer by a mile.
His only sin is that he is often early in his calls. For this "fault" he is ridiculed by those with short attention spans and an investing horizon measured in minutes or months or years, not decades.
I'm a bit surprised by the ignorant attacks (not just this post, but previous ones) on Grant by ZH'ers. I'd expect that commenters here would know better, but since the comments at this site often degenerate now into Market-Ticker style lunacy, I shouldn't be surprised.
Thanks for any and all Jim Grant pieces TD. He's one of the very best financial historians alive.
Thanks. I just poured a little of my 40oz on the floor in his honor. Respect.
First off, unformula, I flagged you as junk by mistake, damn mouse wouldn't work and I was clicking around and it worked right on you junk link. Sorry.
They will say no QE3 and do it anyway under proxy. Won't get on their balance sheet either.
Was that Grant's brother in "The Money Masters"? Or twins, separated at birth...
I don't know whether it's The Bernank effect or HFTs ramming the market up every chance given, but if the market was allowed to 'breathe' a bit more, up and down, I think people might be a bit more accommodating about it. Instead of which we have the continual ramping up except on the rare occasion (S&P shifting US stance to negative AAA, Fukushima), following which ramp up again.
DavidC
there will not be Q3, because there will be no world left to Q3! at the speed the world is imploding, in two months, what will be left?
Good. You agree QE3 in inevitable. I have been confused at times, e.g.
Exclusive: Bill Gross Dumps All Treasuries, Brings Total "Government Related" Holdings To Zero, Flees To Cash - No QE3?
Submitted by Tyler Durden on 03/09/2011 10:02 -0400
This is the most cash the flagship fund has ever held, and the lowest amount in Treasury holdings since January 2009 before it was made clear that the Fed was going to adjust QE1 to include Treasurys in addition to Mortgage Backed Securities. PIMCO's Treasury holdings peaked in June 2010 at $147.4 billion and have declined consistently ever since. And while we expected that the spike in MBS holdings (at times on margin) was indicative of an expectation that QE3 would monetize mortgage backed securities, the ongoing decline in that asset class now leads us to believe that Bill Gross is now convinced there will be no QE3 at all, at least based on his just putting his money where his monthly pen is! And if Bill Gross, the most connected person to the upcoming actions by the Fed, believes there is no more quantitative easing, it is really time to get the hell out of dodge in all security classes - bonds, and most certainly, equities.
However, the pause between QE2 and QE3 prediction is too obvious and dangerous, IMO.
I'm not sure the Fed needs to announce security purchases? And the PD's that control the Fed should be willing to warehouse UST's for months if they know what other credit the Fed will buy from them post-QE2, for a premium of course? I don't see the Fed "pausing" because it is not what their owners will tell them to do.
Agreed, this is the most sensible thing I've seen written regarding QE3. Strip out all the economic flim flam rhetoric and get right to what matters...... the PDs are calling the shots, and it's free money. The spigot will be open until there is sufficient outrage to demand it be shut off.
As of now at least 95% of the population have never even heard of QE, so there is a long way to go until there can be outrage about it.
They may not know about QE but they know the DOW, S&P and Russell and the rise in their 401k. To those who are still employed and holding equity 401k only have housing to worry about. The "its all good" mentality prevails.. The fact that our economy is screwed and full of holes is immaterial. QE papers over, most problems.
I think the argument here is about tactics and timing. Most of us have said that the real economy cannot go it alone. That still holds as the financial system has not been fixed. QE has to start again under a different name perhaps, but it will start. Benny may have to fire warning shot across the Congressional bow in mid summer, but it will just be for show.
I like Grant. As the lead in indicates, the Observer is required reading, ESPECIALLY for PM investors and those of us who hope to wake up someday to a real stock market (if there ever really could be one one.)
Grant has always been skeptical of Greenspan and Bernanke and easy money. He calls QE money printing so I like him there too.
But I dont know if its his Ivy league background or long association with the system, he just never goes far enough for me and says the whole thing is just crazy. He admires some early Fed Presidents which gives me pause. If he would just say "the Fed Reserve System is absolutely broken and needs to be dissolved" then he would move up the list. He has not been as strident as people like him -- with termendous influence inside the system -- need to be. Maybe its just not in his nature. Still like him on balance.
He could learn a thing or two from the author of this site on how to take a stand.
The Bernank will pursue QEIII, if and only if, the market lets him. If the dollar falls 20-30%, gold goes over $2500, and silver goes over $150, at the suggestion of QEIII manifesting, QEIII will not come about. Prepare for the mother of all wip-saws. Remember should the dollar become confetti, gold and silver go to the moon, the FED becomes irrelevant. In the end, the Bernank will do what is in the FEDs best interest, which means retaining power. Now if the dollar is down 10% or less, and gold is somewhere below $2000, and silver is below $80, QEIII is a fait accompli. So the Bernank will only do what he can get away with.
http://www.TheAngryGrapes.Com
Bob Chapman:
Common sense would tell you the Fed and other central banks will flood the system with money and credit in order to loot it one last time. They know the most money is made and stolen in the final sages before planned collapse. In just 2-1/2 years the Fed and Congress will have spewed $5 trillion into the system. This is an endeavor that began ten years ago. Why do you think this is being done? Not only in the US but also Europe, the UK and other countries as well. Why do you think everything possible has been done for over 20 years to keep gold and silver prices down? They had to kill the canary in the coalmine. They couldn’t let the performance of gold and silver give away what they are up too.
From 12-24-09 on PBS
Then Grant went on to predict higher interest rates and FED tightening. Few people are more dangerous than articulate morons and this guy fits it to a T.
whoa there. Dont slam the guy for predicting something a SANE Fed should have done. How could he have predicted Bernank would attempt to destroy the country.
Bernie Madoff sat in an office all day moving numbers around on a spreadsheet and calling it wealth. Everyone said he was an evil criminal. Benny Bernanke and Timmy Geithner do exactly the same thing, on a much larger scale. Who is the greater criminal here? At least Bernie's scheme was voluntary.
++++ ...I'd love to see MSM compare Bernanke to Madoff.
Madoff investors seem likely to get a lot of their original investment back.
What are the PD's going to do for the 50 year old people standing in line for part time jobs at McDonald's?
No new QE iimmediately after QEII. The Fed will pump with maturing MBS's but that will be a small amount each month compared to main QE. The main point is the Fed and big banks have stashed away a pretty good load to try and keep the market up after QEII ends. You don't think they've spent it all do you? So the market will stay up with occassional help from that $$. This "apparent" self support will tank silver and gold. Look for a huge drop in the precious metals after the end of QEII and the market stays UP!
NOW, if/when they run out of "market support funds" AND the economy is clearly tanking, we will see QEIII formally announced. But we're months away from that happening barring some exogenous event (and it's got to be a biggie....nothing as chicken shit as a 4 unit nuclear plant in meltdown).
I don't think the FED can do anything secretly anymore. On the one hand you have bloggers like ZH that serve to uncover the truth about what is going on. The Treasury and Fed don't like it but can't stop it. Also, although we haven't heard much from Mr. Ron Paul lately, he is none too happy with where we are as a country and I'm sure he would disregard all the stern advice he's recently been given about the state of our affairs (i.e., shutup and leave the Fed alone) and go after the Fed for blood if he knew there was secret manipulations going on.
Bernake knows he has to be open with his moves.
QEIII? Well if the economy keeps improving; may not be needed. On the otherhand, if things backslide, it's a given.
With different reasoning i have received 30 junks saying the same thing a month ago. As well as various junks here and there for posting the end of qe2 will be mostly a nonevent
I am trying to catch up with robo.
Unlike robo i post my trades.
I junked you for whining and bragging in the same post. Your welcome.
I junked you for junking him for whining and bragging in the same post, and for writing "Your welcome." You're welcome.
And I junked you because you junked him who junked the other and because of the grammar wisdom you just needed to spread on this board.
And I just had to junk you as well, because your avatar is going to give me nightmares!
;-)
And I junked everbody in this thread. Because The FED was broke. It borrowed silver and gold from china. It wasn't paying it back. So china forced them to swap technology and jobs. Now they got the technology but the jobs don't do any good if they war with the US nd UK.
Now the western hegemony group is turned into a robber state. Let's rob iraq and empty dey vault. Let's rob libya and empty dey vault. Let's rob russia and collapse thier economy.
China got their bribes. Yapping about american credit rating is nonsense. Setting up legitimate honest deals and yapping about the stuff that people want to talk about in public while not mentioning the stuff people don't want to talk about in public using the stuff that it's ok to talk about as a hipocracy over the nasty stupid shit.
It's all weather now.
The sunshine is a lie. The rain is a lie, the hurricanes and tornados and tsunamis are the only truth here.
http://www.youtube.com/watch?v=v9oOS_sXzxk
I find the concept interesting here, but I don't follow this connection:
"QE ends causing a fall in precious metals"
The implication seems to be that PMs are being bid up by the QE beneficiaries. I don't think that's the case. If anything, it would appear to me that QE is making it easier for the big players to suppress PM prices.
How does "end of QE" equal "PM crash"? I see it causing an equity crash or bond crash, sure.
The Feds purchase of “huge” quantities of government debt signals the end game is getting close. This might not be the case if anyone believes the government will drastically cut spending without a serious crisis! The drama involved with cutting less than 500 million out of 3.7 trillion budget is confirmation that the politicians don’t get it!
"Alternatively we would be delighted to refund your subscription."
You are one Class Act Mr. D. Just something else.
:)
Dont know if this has been posted, saw it at WSB.... Hilarious.... http://www.youtube.com/watch?v=1UtuX-T8bgw&feature=player_embedded
Thanks. First time I've seen it and it is funny.
It actually makes a real argument for a pause in QE. Interesting.
Nothing is simple...
All the ones who matter say QE will continue and they are going to be right again: TD at ZH, Grant, Sinclar, Rickards, et al.; and now Dudley at JPM seems to confirm, no less.
Jim Grant is a giant and should be paid attention too. Sinclair also says the same thing without batting an eye -- QE indefintely by the Fed (Sinclair predicted $1650 gold price for 2011 --- ten years ago in 2001! Sinclair also disgorged the Hunt brother's silver stash for them under Volcker's direction).
QE will also continue so says Jim Rickards -- in stealth manner -- by rolling over cash flow. But ZH's recent analysis and dressing down of the $750 billion/yr figure meme exposed this as impossible since the figure is too high to be plausible.
Now there's this....
Bill Dudley of JPM confirms (via Bloomberg & GATA 4-21) that the Fed would probably not go cold turkey by w/drawing QE but could/would finance QE with maturing treasuries to $17 billion per month while maintaining the current balance sheet. For the captcha challenged like me, who need calculators, that's $204 billion per year, much more in line with TD's analysis than Rickards' sky high figure of $750 billion. But I still give Rickards partial credit for predicting a stealth QE component, which is exactly the kind of shit we've come to expect from Benzebub.
QE now seems to be confirmed by the Fed's keeper so it looks to be incrementally going unofficially official. The only quesiton now is how much? And what will they call it to obfuscate the CNBC audience? Will Steve Liesman even realize what's happening? Will Erin Burnett fret about a bubble in silver and gold during QE VI with the DXY at 54.2?
I think we might see QE continue, but hidden from view. They know the debt math, and they know the stock market won't hold up without manipulation. What they want most is to prove the economy is ready to stand up on it's own. What better way to do that than to continue QE, but hide it some new way.
They could just as easily collude with foreign central banks or even their own off-shore accounts. It doesn't have to pass through the colon of the PD's. The Fed never has to show a profit and never gets audited. It can quietly take on an infinite number of treasuries. This could fool people into selling commodities, and actually engineer a recovery over the longer term.
Maybe I'm just giving them too much credit for having brains, but it seems like the sell QE end buy QE resume trade is just too crowded.
Killing the US-Dollar in order to get those jobs back from China, Corea and Vietnam. Pushing up commodities to make long distance transport more expensive = less import and job creation in the US. Is this what BaOba's machinations are all about?
Bullshit!
It's nice to have a variance in opinions dumb ass.
While everyone else waits for this to unfold, why don't we start talking about how we should end the fed?
At some point, any additional QE will be bad for asset prices in general. Dollar goes lower, prices shoot the moon, every dollar spent at the pump/etc. is one dollar not spent on goods in the economy. It's already happening with fuel prices wiping out airline profits and margin compression hitting everyone. This is bad for EPS and the markets will tank. There's no way out of this except for a massive correction. You saw the dollar peg 70 in 2008 and look what happened. We're facing a repeat, only this time there are no more games to play. Not to mention, government spending as a percentage of GDP has to come down, which is also bad for prices. I hate to say it again, but inflation is deflationary. It isn't sustainable.
+ 1 Local TV in here in the Bay Area running stories about how gas prices are affecting business. The dollar will not collapse it would ruin everyone. The DXY is making a double bottom and will move higher from here. Obama want's to be stay in office he is not going to let the dollar crash and neither is Bernanke last time I checked we are the largest economy in the world. We do have exports and in a way we have lifted the world by having other countries create products for us.
China is not going to let the dollar collapse they cannot afford it financially or socially they are already feeling the pain of higher commodity prices.
The run was fun while it lasted but it's coming to an end again.
I was greatly amused by these statements.
By your historically ignorant "logic", NO currency depreciation, collapse or hyperinflation has EVER occurred, because the vast majority of the hundreds of millions who have already suffered such monetary calamities were even less able to "afford it" than Americans today.
Your reasoning is deeply flawed. Please try again.
QE-#3 is the dumping of Freddie AND Fannie dark pools @ 10 cents on the Dollar! It's banks forming new pools of money to purchase their own bad debt!
Its a question of weeks, the silver correction:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=140#p31889
The observed acceleration of price growth and coming crash was predicted here, on March 13th:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...
To understand its a precrash situation, just measure the sharp growth number of times word silver is used in trader communications, in this site, for example. To have a bubble in silver, its not necessary to involve larger public, its enough that clusters of precritical herding are created within trading community where everyone shouts "buy physical silver".
That said, long term OWNING of silver is still safe, if its not used as collateral to some loan, but bought with own money, the value will drop for about 1-1,5 years by 40-60% (or , to 25-30 USD) compared to today, more compared to eventual peak ( 50 USD? -predicting superexponential peal values is almost impossible-its fine balance of unlimited sentiments and limited resources and creeping fear ) but having long positions is not-it is very dangerous right now.
Will a drop in silver cause drop in stocks as well as all commodities will correct a bit, except oil? It should, I think. But I am not sure.
You've warned everybody. Those who care to listen already know, those who choose to believe otherwise will not be convinced by anything you or anyone else has to say.
Regardless of how much QE & the manner in which it's implemented the fact is the system is fixed & will remain so. Speculators are subtly coerced into bringing the money men's plans into fruition. Even if does crash they can just as easily pump it back as they've so arrogantly shown over the past couple of years & it is always in the speculators best interests to follow suit. After all Wall St is all about serving mammon. Until money no longer runs our governments we are at its mercy. Unfortunately mothernature does not control the markets, Wall St does.
Can't see how QE can end just as I can't see how Bernanke can ever let rates rise again, all other things being equal. Whatever the backward looking economic numbers were claimed to be, the forward looking numbers do not paint a picture of ongoing recovery. Even the IBank economists are ratchetting down GDP estimates. Perhaps QE can continue with a combination of funds from maturing Treasuries and selling put options on both short term instruments and long term USTs, which as stated in last weekend's article, act as a kind of sleeper QE.
Rate rises cannot happen because Timmy has shortened the Treasury's duration too much. A 1% rise across the curve would add about $150 billion to the deficit each year, at a time when Congresspeople are congratulating themselves for a mere notional $38 billion cut in spending.
On top of that, all the TBTF banks have become wedded to low rates. All the new loans and all the refi's reflect the current low rate environment. To have all of them try to re-match book as rates rise would be a disaster.
Someone smarter than me might know the answer, but these are the two equations I am trying to reconcile:
Rising rates=death to the banks, larger deficit, and no recovery
More QE=death of the dollar, high inflation, low business margins, and death of the recovery
The only thing that works is massive austerity yielding a balanced budget, which would then make QE an asset swap instead of monetization. Short term pain, but maybe longer term real growth. If I made a guess as to what Bernanke is thinking, it is that he hopes he can keep the dollar in a slow decline (with maybe 68-70 DXY as the target) while Congress and Obama come to terms on real budget cuts. Sadly, there will never be enough cuts, and Bernanke will (almost already has) lose control of the dollar's decline.
stick a fork in it and btfd
kids qe 3 already here
steep downfall earlier than in most years in April and early May, so there is a distinct possibility that despite gold and silver mining stocks normally waiting until late August to put in a bottom, that the bottom may already be in.
car loans
secret method of killing your BUSINESS that was so secret that nobody knew they did it. This is because if the STASI kills a bunch of dissidents' overtly, then their dead guys surviving friends and families could piece together what was in common among the dead that the STASI used to spy on them.
cheapest car insurance
It was the fault of the Japanese for allowing such a reactor to be built in that location without additional safety measures being required. That's the real story here. That and the shitty enforcement of already lax safety standards.
florida home insurance
What u kno about sales, expenses and profit would fill a the thimble.
bad credit loans