Big Picture Comments on the Fed and ECB Policies
This interview was recorded yesterday shortly after the Fed minutes were released. Marc Chandler and I discuss the Fed policy when it comes to unwinding its balance sheet and continuing to raise rates. We also look at what the ECB is expected to do next year. Overall even if the Fed begins its unwind of the balance sheet it will only depend on the market’s reaction if they continue.
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Click download link to listen on this device: Download Show
I have been saying this for over a year: If the Fed cannot raise interest rates, they won’t raise interest rates. The Fed cannot raise interest rates without killing the US dollar, and the world economy.
The bankers WILL slowly be moving out of fiat and into cryptos (primarily BTC), but there is a limit as to how fast that can be done, so the fiat monetary systems will survive, at least, that long.
Let me expand on “killing the dollar”.
At first sight, the assumption would be that if the interest rates are raised in the US then money will flood in from other currencies and the dollar would strengthen.
However, if interest rates rise in the U.S., because of the debt load: the economy tanks and the Fed is forced to increase the rate of monetization of debt. With increased monetization there would be movement out of fiat into hard assets and alternative stores of value (cryptos, perceived safer fiats, etc)
Here’s a rough guide as to what happens to bond funds when interest rates are rising.
A 1% increase in the interest rate on a bond portfolio with an average term to maturity of seven years will drop the value of the portfolio by approximately 7%. A 20 year bond would drop by approximately 20% on a 1% rise. That”s quite a bit for a bond that has a yield of,say 2%.
The commodity complex just cannot catch a break. I will be surprised if the July bottom holds. Yes it could be setting up a double bottom, but would you bank on it? If the July low gets taken out, The January 2016 low will be within spitting distance.
http://stockcharts.com/h-sc/ui?s=GCC&p=D&b=5&g=0&id=p11486764258&a=539999771&listNum=1
There appear to be internal discussions within the FBI as to whether Trump should/could be assassinated.
Certainly Philip Mudd has warned about such a possibility. His background:
https://cchs.gwu.edu/philip-mudd
English LIt major………
Spanky, your black “candle” fantasies cloud your judgement!
Maybe I’m crazy….
Crazy like a fox that is!
FEBBY FED………Lovey dovey……..Dubley dud…Sept Song…..VOting twice if you are DEMOWIT.
2 Quadrillion in World wide debt……..
Make up your damn mind already. (I may not like the answer though!)
http://stockcharts.com/h-sc/ui?s=GDXJ%3AGLD&p=D&b=5&g=0&id=p12089198896&a=540009876&listNum=1
Do charts really work in a rigged market?
Assange Vows To Prove That Russia Was Not His Source In 3-Hour Meeting With Congressman
“Julian emphatically stated that the Russians were not involved in the hacking or disclosure of those emails. Julian also indicated that he is open to further discussions regarding specific information about the DNC email incident that is currently unknown to the public.”
I think that Assange is a walkin dead man.
The yanks will kill him or at the very least find a deep and dark dungeon of torture to put him in, chuck the key, never speak of him again and he will be forgotten.
He wont be able to hide anywhere on earth but Russia, I hope he finds a way there.
The Gold market(all equities and Bullion) is approximately 1/20th the size of the Bond market.157 Trillion Verses just 8 trillion for gold.
If just .05% of the bond market decides to put funds into gold, the move would be truly explosive.
Or 0.1% into cryptos?
Good point CFS:
I think to many people are wondering whether money flows into the cryptos are hurting Gold prices.
The real action is in the Bonds.
Bitcoin Cash just took the number three market cap spot away from Ripple.
Bitcoin Cash $390.25 up 29.56% today
the marketing name is better than Ripple………jmo
That is KIM,… thinking what Trump does next
Good interview.
Thanks for the continued commentary on the Central Banks and their doings.
This really helps to keep things in perspective and develop an informed opinion.