Phoenix Capital Research's blog

The Fed is playing a very dangerous game here. It was way behind the curve on deflation and economic weakness going into the crash of 2008. Today, it continues to worry about deflation when the clear signs show that inflation is already on the rise.

If they’re bailing on the market… what are the odds trouble is approaching?

The MSM won't touch this topic, nor will the Fed. But it caused 2008 and it hasn't been fixed.

Since 1998, the markets have been in serial bubbles and busts, each one bigger than the last. A long-term chart of the S&P 500 shows us just how obvious this is (and yet the Fed argues it cannot see bubbles in advance?).

It’s now clear that the spate of positive economic data coming out of Europe prior to the German Federal Election in September 2013 was just political gaming to get Angela Merkel back into office.

We find it truly extraordinary that anyone is surprised the financial system is under duress again.

My point with this is that when the capital markets “break” due to a loss in credibility, the shift tends to be both swift and violent. 

But at the end of the day, if your creditors lost faith in your ability to repay it… it’s GAME OVER. This is hitting the emerging market space today.

If we break below these... LOOK OUT BELOW.

Between 2008 and 2013, China’s credit market increased from $9 trillion to an incredible $23 trillion.

For gold to hit a new all time high adjusted for inflation, it would have to clear at least $2,193 per ounce. If you go by 1970 dollars (when gold started its last bull market) it’d have to hit $4,666 per ounce.

Market tops occur when investor psychology changes. But it’s not a clean shift. Investors, like any category of people, are comprised of numerous groups or sub-sects: some get it sooner than others.

Fod Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today.

There are definite limits to what QE can do. Now that even Bill Dudley and other Fed officials admit that the Fed doesn’t understand QE, it’s only a matter of time before the market begins to crumble.

The Central Bank rig of the last five years appears to finally be ending.