In regards to an earlier post I will admit that a prediction date is rather amateur and will refrain from making such specific calls in the future without a specific reason. However, I will not rescind my opinion that the market & DXY will tank like a heart of 700lb fat lady on a triathlon.
There are those who are convinced that the economy is improving as QE offsets the deflationary pressure from the subprime and credit crises'. There are those who are convinced that the FED's QE is causing inflation abroad through devaluing our currency towards hyperinflation (I'm in this). We all know the unemployment numbers as well as new home sales and Case Schiller are not really improving. QE has certainly pushed the yield curve to a normal healthy looking curve in which case POMO does the rest, shooting amphetamines into the equity markets artificially sending the indices higher.
The gap between headline inflation and core inflation are concerning because people can't eat their ipads. It is also argued that supply shortages are the reason for oil & commodity prices shooting upwards.
But what's the truth? Probably a combination of all concerns above. We'll know on June 30. The end of QE2. Will the FED start QE3 or not? Yes, because of Japan + Europe? No, because the economy is improving? I call time-out. Who's going to pick up the slack once the FED stops purchasing US treasuries? I share this question with PIMCO's Bill Gross and you should too.
I think the FED has got its fingers on the pulse of Money Velocity and as it keeps falling along with all the other important economic numbers, they'll have a marked propensity for more QE. Bernanke is a deflation/ Great Depression expert he is far more averse to a deflationary environment. The FED has stronger controls on inflation with interest rates and reverse repos. Letting the air out of the tire is far easier than working to pump it up.
As QE causes an artificial boosts in equity prices and causes revolutions abroad with inflation, where's the beef? Rotting because it was left out on the counter too long. Putting it back in the fridge won't make it any safer to eat. You know what I mean? My fear is, this stimulus is nothing more than a temporary fix to buy us time and we are in a situation where we must QE towards hyperinflation and dollar destruction or NoT QE and head into a deflationary spiral.
Such domestic and international discontent may end with the international dollar's decline. So as the military industrial complex finds reasons for war caused by revolution (Libya & MENA) to boost the dollar (risk aversion trade) and as QE may keep going on to weaken the dollar and boost the domestic equity markets, the international community will eventually call bullS**t and the cards will all fall.
In the meantime, look for George Soros to make a big fuss [Bretton Woods II ]and watch all the nations ignore him on April 8th.
There are those who are convinced that the economy is improving as QE offsets the deflationary pressure from the subprime and credit crises'. There are those who are convinced that the FED's QE is causing inflation abroad through devaluing our currency towards hyperinflation (I'm in this). We all know the unemployment numbers as well as new home sales and Case Schiller are not really improving. QE has certainly pushed the yield curve to a normal healthy looking curve in which case POMO does the rest, shooting amphetamines into the equity markets artificially sending the indices higher.
The gap between headline inflation and core inflation are concerning because people can't eat their ipads. It is also argued that supply shortages are the reason for oil & commodity prices shooting upwards.
But what's the truth? Probably a combination of all concerns above. We'll know on June 30. The end of QE2. Will the FED start QE3 or not? Yes, because of Japan + Europe? No, because the economy is improving? I call time-out. Who's going to pick up the slack once the FED stops purchasing US treasuries? I share this question with PIMCO's Bill Gross and you should too.
I think the FED has got its fingers on the pulse of Money Velocity and as it keeps falling along with all the other important economic numbers, they'll have a marked propensity for more QE. Bernanke is a deflation/ Great Depression expert he is far more averse to a deflationary environment. The FED has stronger controls on inflation with interest rates and reverse repos. Letting the air out of the tire is far easier than working to pump it up.
As QE causes an artificial boosts in equity prices and causes revolutions abroad with inflation, where's the beef? Rotting because it was left out on the counter too long. Putting it back in the fridge won't make it any safer to eat. You know what I mean? My fear is, this stimulus is nothing more than a temporary fix to buy us time and we are in a situation where we must QE towards hyperinflation and dollar destruction or NoT QE and head into a deflationary spiral.
Such domestic and international discontent may end with the international dollar's decline. So as the military industrial complex finds reasons for war caused by revolution (Libya & MENA) to boost the dollar (risk aversion trade) and as QE may keep going on to weaken the dollar and boost the domestic equity markets, the international community will eventually call bullS**t and the cards will all fall.
In the meantime, look for George Soros to make a big fuss [Bretton Woods II ]and watch all the nations ignore him on April 8th.
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