Phoenix Capital Research's blog

The Fed has already gone too far with QE. QE 2 spent $600 billion and didn’t accomplish anything (as I and several commentators have recently noted). The Fed’s balance sheet (roughly $3 trillion) is already larger than the economies of the UK and Brazil. Has anyone bothered to ask how exactly the Fed going to unwind this? Everytime the Fed halts QE the markets implode. Do you really think the Fed could withdraw even $1 trillion in liquidity without forcing systemic collapse?

This is hardly what I’d call a bullish chart. Gold actually looks to have peaked in mid-August and is now correcting. Indeed, if it doesn’t rally hard now, this pattern could see prices down to $1650 in short order.

QE 3 won’t solve this mess (assuming it even arrives). Neither will the European bailout fund. We’re already in the Second Round of the Great Crisis which will see the EU broken up, the US economy implode, and a market collapse that will make 2008 look like a joke.

Do you really think the Fed hasn’t already discussed QE 3 and every other insane intervention you can imagine over since the Financial Crisis began in 2008? Do youreally think that the Fed’s magically going to come up with something new that will fix the Financial System?

The Euro could be in the final stages of intervention/ bailouts. On September 8, a German court will be ruling whether it is constitutional for Germany to participate in EU bailouts. Consider that 6% of Germans feel the Euro has brought economic disadvantages and that the German elections are scheduled for just a few weeks later, and we could very well see the court rule to end Germany’s participation in the bailouts.

Anyone who thinks Buffett’s decision to buy BAC is a positive for the market needs to get their heads checked. Buffett bought GS right before the entire financial world imploded!!! You think he somehow timed this purchase well?

With another Crisis already at our doorstep, the litigation is going to be fast and furious. Blankfein is just the beginning. We’re going to see more investigations, more lawsuits, and more accusations of lies and corruption. Do you really think Wall Street CEOs are going to let themselves be the scapegoats for this? All they have to do is say, “we did it because the Fed told us to,” and the legal focus shifts over to Bernanke.

With the German economy slowing, the underlying tensions between the ECB and Germany are intensifying. And with Germany’s next round of elections due in late September, the chances of Germany moving to backstop any additional bailouts are diminishing by the day.

This is a major signal that QE 3 is not coming. Those who are hoping it will need to look at what the markets are telling us. Ignore stocks and pay attention to the credit markets: they’re on DEFCON 1 RED ALERT.

It is quite telling that the S&P 500 has fallen far less than the BRIC markets: the S&P 500 is 16% off its highs, while Brazil is off 23%, Russia is off 22%, China is off 20%, and India is off 28%.

This is a rather odd turn of events… a former Fed official urges the Fed to step in and buy the stock market… just three hours before the markets mysteriously reverses and rallies hard on no real news of note.

This reveals QE for what it really was: just another “hit” for drug addict that is the global debt system. We’ve already passed the point at which the negative effect of monetary easing (inflation) outweigh its positive effect (markets rallying). This is similar to the state of drug addiction in which the drug barely creates a “high” but is ravaging the user’s system with health problems.

I warned to get defensive several weeks ago. That warning is even more important now. I would avoid stocks and Treasuries as neither are particularly safe. I’d have increased exposure to cash and PHYSICAL bullion (Gold and Silver). If you have to remain long stocks shift into large-caps and companies that will exist a year from now (brands and industries people will need regardless of how bad the economy gets).

Courseille had created something that was not only delicious, but an additional revenue stream for his employer (the “chicken” sells for $12, and to be honest, I would have paid $20 for it, it’s that good). Whether the guy knows it or not, he’s a marketing genius (on top of a master pastry chef). I had to meet him.