What Are The Fed’s Options When The Recession Hits?

Nicholas Pardini, Founder of The Davos Investment Group joins me to outline the options that Fed and other central banks have when the next global recession hits. With a world swimming debt and historically low interest rates there are a lot of people saying the central banks have nothing left. We also discuss what the recession will look like for the markets and the winners and losers.

To get in touch with Nicholas you can email him at nick@davosig.com or I at Fleck@kereport.com.

You can also visit the Davos Investment Group website by clicking here.

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Comments:
  1. On March 26, 2019 at 6:50 am,
    CFS says:

    The Fed is walking a fine line. It will reduce interest rates to boost the economy as necessary. (The Japan strategy.)
    Their problem is simple: THERE IS A TIME LAG BETWEEN FED ACTION AND THE RESPONSE OF THE ECONOMY.
    The Fed, therefore, has to guess what the economy will be in the future, rather than simply take economic data and react.
    THAT IS WHY THE FED IS OFTEN STATED TO REACT TOO SLOWLY.

    The fed is learning and doing better than it used to, but there is a problem that the Fed cannot solve, but has to live with; namely, Government Spending, and thus taxation is too high, and we live in an inter-connected world.
    Sure, the Fed can borrow from the future to produce growth in the present, but there really is a limit as to how much and how long that can be done. (Longer than most people think, but not indefinitely.) Yes, the cost of debt can be reduced by keeping interest rates as LOW AS NECESSARY, but eventually people STOP LOANING MONEY, and money-printing has to start. (We’ve gone past that point.) It is only by collusion by all Central Banks, all printing money, that this can work….an essentially potentially unstable situation…….Some mis-step, or some relatively minor event can precipitate a crisis that develops too quickly for enough central banks to react and liquidity problems can create turmoil in currency or stock markets from which recovery cannot happen quickly. We are living in borrowed time as this sconomic cycle has been extended almost as long as about possible.

  2. On March 26, 2019 at 7:33 am,
    CFS says:

    From Ought knows Nought comes:

    https://youtu.be/N1mJpqjWwig

  3. On March 26, 2019 at 7:40 am,
    larry says:

    Hope noone is buying uber or lyft….market makers holding em up into ipo;s….the by is a few months from now if you must…i like the averages….2840/2850 is totally possible into the counter trend bounce,,,good luck to traders…the moment is very very soon

    • On March 26, 2019 at 8:20 am,
      GH says:

      Classic market topping behavior, no?

      I guess it’s a matter of how many IPOs are happening now relative to usual…

  4. On March 26, 2019 at 8:08 am,
    larry says:

    http://tos.mx/NQlWIN…30 minute /es showing gartley sell forming…i like 7 waves up plus tom demark 9 count plus RSI divergence on daily and 30 minute chart….618 around 2838 and 1:1 ab=cd at 2837

    • On March 26, 2019 at 8:11 am,
      OOTB Jerry says:

      After a hope-filled rebound in February, Conference Board Consumer Confidence tumbled in March with Present Situation plunging to 11-month lows.

      Consumer confidence in March fell to 124.1 vs 131.4 in prior month (that is below the forecast range 125.44 to 136.5 from 57 estimates)

  5. On March 26, 2019 at 8:21 am,
    GH says:

    $HUI is challenging its 200 day moving avg

    http://schrts.co/BPZzPJMD

    • On March 26, 2019 at 8:23 am,
      GH says:

      And its 200 week moving average:

      https://stockcharts.com/h-sc/ui?s=%24HUI&p=W&yr=5&mn=0&dy=0&id=p52595895419

      Looks to me like both averages will soon be taken out.

      • On March 26, 2019 at 8:25 am,
        GH says:

        But, these are the precious metals, so disappointment and sideways action when it looks most promising would be par for the course 😐

  6. On March 26, 2019 at 8:54 am,
    OOTB Jerry says:

    System of Justice in Chicago…….LOL…….Comic Release…..The Show must go on…
    https://www.zerohedge.com/news/2019-03-26/smollett-charges-dropped-after-emergency-court-appearance

    • On March 26, 2019 at 10:38 am,
      Wayne says:

      No one, after being falsely accused and, consequently, being forced to endure “the worst time in my life,” just walks away. A black man was nearly lynched for doing absolutely nothing and “the movement” is just going to walk away? Where is the outrage, the indignation? What about the original claim of a hate crime? Smollett is clearly guilty; it’s the only thing that makes sense.

    • On March 26, 2019 at 12:13 pm,
      GH says:

      I wonder how many more hate crimes against whites will be committed with impunity before a critical mass of white people figures it out.

      It’s worth pointing out to anyone who will listen that these are the epitomy of hate crimes, meant to defame whites for racist and political ends.

  7. On March 26, 2019 at 9:00 am,
    OOTB Jerry says:

    TRADING HAS SLOWED in 4th Quarter………Boomers have had it…..I bet……
    http://wallstreetonparade.com/2019/03/federal-regulator-wall-street-stock-trading-plunged-88-6-percent-in-q4/
    The report contained a shocker: stock (equity) trading had plunged 88.6 percent in the fourth quarter of 2018 versus the fourth quarter of 2017 on a consolidated basis at the bank holding companies

    • On March 26, 2019 at 9:02 am,
      OOTB Jerry says:

      HUGE slowing……………..88.6%

      • On March 26, 2019 at 9:04 am,
        OOTB Jerry says:

        Not only did stock trading collapse in the fourth quarter according to the OCC, but according to another chart in the report (see Graph 9b) equity trading revenue plunged to multi-year lows, coming in at $441 million in the fourth quarter of 2018 at the bank holding companies. That compared to $3.86 billion in the fourth quarter of 2017; $3.0 billion in the fourth quarter of 2016; and $3.7 billion in the fourth quarter of 2015.

        • On March 26, 2019 at 9:07 am,
          OOTB Jerry says:

          while Goldman Sachs Bank USA, also Federally insured, lost $407 million trading credit derivatives. Credit derivatives played a major role in the 2008 financial crash and the need for an epic taxpayer bailout of Wall Street banks, and yet, here we are today, still writing about Federally insured banks, backstopped by the taxpayer, trading credit derivatives.

  8. On March 26, 2019 at 9:14 am,
    OOTB Jerry says:

    from 321………..
    The good news is that $1280-$1350 gold is a great price for the miners, and many are surging to one fresh high after another!

    Please click here now . Double-click to enlarge this fabulous GDX chart.

    I’ve suggested that a Friday close of $23 or higher for GDX and $14 for Barrick (GOLD-NYSE) would open the door to a much more significant rally for most gold and silver mining stocks.

    GDX closed above $23 yesterday and Barrick closed above $14. It’s not Friday yet, but this is a very positive sign!

    I don’t expect gold to move above $1350 until Chindian demand begins to strengthen in August… unless there’s a major economic shock in the West.

    Having said that, when it does rise to $1400-$1420, I expect a massive bull run to occur in the miners.

    The logic for this outlook is that most analysts have underestimated the profits that miners will make at $1400+, and global stock markets are likely to swoon again in the Aug-Oct crash season.

    In Sept 2018, gold was in the $1200 range. If it is in the $1400 area in Sept 2019 with stock markets swooning, institutional money managers could engage in a gold stock buying frenzy!

    A September rate cut from the Fed to calm the panic would likely enhance the frenzy.

    • On March 26, 2019 at 9:53 am,
      Matthew says:

      In addition to the significant increase in mining profits, $1,400+ gold would also cause a huge increase in speculative interest since it would represent a breakout from the base that’s been forming for the last 5.5 years.
      In the meantime, let’s see if gold can close Q1 above the 30 quarter MA (currently 1322.45).

      Sentiment is not nearly as bullish as it should be and that is a very good thing.

      GDX looks great and is breaking above an area of huge volume-based resistance (note the volume-by-price bars on the left side of the chart)…
      http://schrts.co/WhmPmyij

      • On March 26, 2019 at 10:03 am,
        Matthew says:

        GDX has Fibonacci fan line resistance at about $24.70…
        http://schrts.co/qjQwqCkC

        • On March 26, 2019 at 10:15 am,
          OOTB Jerry says:

          BTW…..I am enjoying the info, which was associated with the name you supplied for the 13 families.
          https://www.cia.gov/library/abbottabad-compound/FC/FC2F5371043C48FDD95AEDE7B8A49624_Springmeier.-.Bloodlines.of.the.Illuminati.R.pdf

          • On March 26, 2019 at 10:17 am,
            OOTB Jerry says:

            Some of which I knew from Steve Savoy ….silver stealers….great to tie some of the info together….jmo

          • On March 26, 2019 at 10:18 am,
            Matthew says:

            That’s great, Jerry 👍

          • On March 26, 2019 at 10:20 am,
            OOTB Jerry says:

            I keep looking at Trump pictured with Astor….in silver stealer……lol

          • On March 26, 2019 at 10:30 am,
            OOTB Jerry says:

            From the book………….
            I do not fear the Illuminati taking over this country and doing away with the Constitution, because
            they took over this country long ago, and the Constitution has not technically been in effect due to
            Presidential emergency decrees since W.W. II. Being a follower of Christ does not mean we should
            fear. Perfect love for Almighty God casts out our fear for the situation He has place us in. Don’t think
            for a moment you are going to vote the Illuminati out of office. They control the major and minor
            political parties. They control the process of government, they control the process of information
            flow, they control the process of creating money and finally they control Christendom. (However,
            God controls the hearts of His people.)
            I have provided information on how to respond in some of my other writings. This book will not tell
            you how to deal with the Illuminati families. This volume is simply the first of two volumes which is
            published to give an overview of what the Illuminati is. In short the Illuminati are generational Satanic
            bloodlines which have gained the most power. A generational Satanist described the Illuminati as
            “Satan’s elite.”
            Bloodlines of Illuminati
            by:
            Fritz Springmeier, 1995

          • On March 26, 2019 at 11:19 am,
            Matthew says:

            Whatever the details are, it is absolutely infantile to think that Trump would or could do anything to challenge his superiors.

          • On March 26, 2019 at 3:13 pm,
            Big Al says:

            On this one Matthew, I can’t agree. I voted for him and continue to support him because I believe that, as much of an idiot as he can be, he is at the very least his own man! Any comments?

          • On March 26, 2019 at 3:25 pm,
            OOTB Jerry says:

            Owl……you might want to scan over the book, I posted above to get a clue as to what Matthew is talking about……This is a little bigger than just one man…..jmo

          • On March 26, 2019 at 3:28 pm,
            OOTB Jerry says:

            Being a christian,….you might see how this is all coming together…..

          • On March 26, 2019 at 7:13 pm,
            Matthew says:

            Al, no head of state is his own man. Just like the MSM (including FOX), Trump is guided by the globalist agenda and is surrounded by its agents masquerading as advisers.

            Senator McCarthy was right and the sheeple kept sleeping. The media was captured a long time ago but not more than 10% of the population noticed.

          • On March 27, 2019 at 12:39 pm,
            Excelsior says:

            Bingo Matthew & OOTB.

      • On March 26, 2019 at 10:16 am,
        Matthew says:

        Not many seem to understand how positive the action has been this year…
        http://schrts.co/JHfDmyjg

  9. On March 26, 2019 at 9:15 am,
    OOTB Jerry says:

    Stewart Thomson…..report above…..

  10. On March 26, 2019 at 10:15 am,
    larry says:

    nugt hit upper TAS profile on daily…i got out at 22.36…done for a while…25%ish return