This is right on
posted on
Jan 07, 2013 09:39AM
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Clive Maund in his usual dry way sums up the situation. http://www.clivemaund.com/gmu.php?art_id=68&date=2013-01-06
Just who does the Fed think it is kidding, making noises about choking off QE and Treasury purchases? Any serious attempt to do this at the eleventh hour would crash both the bond and stockmarkets and send interest rates skyrocketing, and they know it – it would be like the Captain of the Titanic grabbing a bullhorn and announcing “You see that Iceberg over there? – we’re going to head straight at it” – actually he might as well have, for all the difference it made. So it almost looks like they were engaging in a bit of “tree shaking” for their crony pals, especially with respect to the resource sector. In any case, when it comes to QE they have got some serious competition this year with Japan entering the fray as the new big QE kid on the block, so it hardly looks like they are going to bow out of the QE game at this stage. There is something tragi-comic about the way most investors hang on to the Fed’s every word, as if they were gods instead of what they really are which is an elite racket who have painted themselves into a corner after years of malfeasance.
So the sharp shakeout late last week, in a panicky response supposedly due to the Fed freaking out investors, looks to have thrown up another opportunity to accumulate more PM sector holdings ahead of the next uptrend and as we will now see, there is strong evidence that Friday’s intraday plunge marked the end of the correction in force from early October.