The Fed is stuck between a hard place and a grenade
Sol Palha of Tactical Investor - IF - Fri Mar 04, 10:43PM CST
"He who trims himself to suit everyone will soon whittle himself away." Raymond Hull
The Fed is stuck in between a hard place and a grenade. Given this option they will choose the hard place. Unless you are
looking for a one-way ticket to nowhere, you won’t choose the grenade.
The Fed has nowhere to go. There is only one option available inflate
the money supply or die trying to.
Central bankers worldwide have already started to work on the next level of QE. It’s called negative interest rates,
and it’s just a matter of time before it comes to the U.S. The U.S
will hold out for a bit longer as they want to maintain the illusion of a
somewhat stronger currency.
Remember, this is a race to the bottom, and
so the idea is to finish last instead of first. The Fed is already
stalling. This is clear signal as any that they are already planning the
next line of attack. And please do not fall for that mumbo-jumbo that
the Fed is panicking. Having no choice and panicking is not the same
thing.
The
Fed and its friends always win. Those that fight the Fed have a short
life span. They have had decades to fine tune this nefarious art of
fleecing the masses, and they are experts at it now. Those at
the top have already used a vast portion of their paper wealth to secure
valuable hard assets so, if the entire market were to collapse tomorrow,
they would not lose anything. In fact, they will stand to make even
more as they will come in and purchase everything in sight for pennies
on the dollar.
However, the markets are not going to collapse tomorrow. One day in the future they might, but that day is not tomorrow.
The
war on interest rates is on, and you cannot fight a trend in motion, so
the U.S will have no option but to join the battle. The chart below
clearly illustrates how the world has embraced the concept of negative
rates.
We have provided many factors over the past few months indicating that
this recovery is a hoax, but instead of fighting the trend, we have
taken the unconventional view that, despite the economic recovery being a
hoax, the markets are destined to trend higher.
The weapon of choice
now is to throw increasingly large sums of money at the problem, and
this works because the masses are not ready to fight. The can will be
kicked down the road until the road ends or the can becomes so heavy
that it’s impossible to kick it any further. We are still a long way from that point.
The debt is going to increase to a level that will one day be labelled “as insanely unimaginable”.
Sounds crazy; well then tell us what you make of the fact that it took
over 100 years to get to $1 trillion, and now it surges by that amount
every year.
Conclusion
The
war on interest rates means that deflation will be here for longer than
most expect, so it will be interesting to see how commodities in
general, especially the precious metal’s sector hold up.
Gold is off to
a pretty good start, but it remains to be seen if a breakout past the
strong zone of resistance at $1350. It needs to put in a pattern of
higher lows which it has not managed to do since 2012. The next
pullback will be interesting, for it leads to a higher low, and then
this recent breakout might have some muscle behind it..
Low rates are positive for stocks and, since we are in the midst of a
negative rate battle, the odds are in favor of this market trending
higher.
"Do not trust to the cheering, for those persons would shout as much if you and I were going to be hanged." Oliver Cromwell
WJB Note: I agree with the writer of the article's higher lows pattern going forward in Silver and Gold. The activity on the Silver over the last two weeks suggests to me that Silver is in the first mode of pricing that signifies the beginning of a break-away market to the upside.
Crude
Oil appears to have behind the recent price increases a coalition of a
very capable market support institutional group at work that appears to
be intent on supporting and driving prices higher. Crude Oil closed on
its high for the week at about 35.92 per barrel. The next resistance
levels are 38.00, 43.00, and then 49.00. My guess is that Crude Oil
will establish itself in a range between 42 and 48 in the not to distant
future.
6-MONTH CRUDE OIL CHARTIf
the writer of the article is correct per interest rates, we may be
seeing the 30-Year Bonds moving towards and through their contract highs
of the last 10-years.
On a last note,
the article mentions the increase in the debt over x-years. The point
that most financial writers do not include in their thinking (if not all
due to the complete void maintained per collective government
institutional investment totals there) is "The other side of the coin"
governments collective investment holdings held globally, that are on
budget, and most important of all, those that are held off-budget.
"Tangible investment holdings". Over the same time period of x-years,
government collective investment holdings held now globally have
increased substantially over the debt being incurred by a factor of at
least five to one. The takeover by government of all tangible
assets both domestic and globally is where the "Silence is Golden"
aspect is strongly at play, intentionally with great effort kept outside
of the view of the populace.
TREASON: "Treason doth never prosper; what's the reason? For if it prosper, none dare call it treason." Sir John Harrington, 1561-1612.
Sent FYI and Truly Yours,
2 comments:
YAY WALTER! BRAVO BRAVO!
"do not trust to the cheering, for those persons would shout as much if you or I were going to be hanged.",... kind of says it all ,...
Post a Comment