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Old 07-09-2013, 09:42 AM   #1
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Has QE reached the tipping point?

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...
Yet the Fed continues to purchase more government debt, as its balance sheet last week reaching another new record high with total assets of $3.49 trillion. The Fed is not tightening monetary policy, so why are interest rates rising even though the economy is weak and the Fed continues to purchase debt for its QE program?

I think there is only one logical answer, Eric: Interest rates are rising because of QE. We have reached a tipping point, meaning that QE can no longer keep interest rates from rising. The market is now focusing on the dark-side of QE, which is the inflationary consequences of all this money printing.

Rising interest rates with QE ongoing means that we have reached the stage where the Fed has now lost control.
...
http://kingworldnews.com/kingworldne...ld_Market.html

Correct me if I'm wrong, but the rates started rising when the Fed started their tapering talk. They spooked the markets and now the markets are getting defensive.
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Old 07-09-2013, 10:34 AM   #2
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I agree the taper talk spooked the market but there are a few other things going on. I've noticed that more Government employees are getting raises again at the national level and I read an article that In California the Highway Patrol just got a 5% raise. They got the raise because other California agencies got a raise first. When other agencies get a raise there is actually a law that requires that the Highway Patrol get a raise (imagine the power of that union). Governor Brown and the legislature got the voters to raise the sales tax (highest in the nation) and then they started giving out raises. Nationally there aiso appears to be some improvement in the labor market. Not great but improving. This is all going to create classic wage inflation, and that is what markets are sensing as well as the taper talk.
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Old 07-09-2013, 11:20 PM   #3
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Originally Posted by Aubuy View Post:
Nationally there aiso appears to be some improvement in the labor market. Not great but improving. This is all going to create classic wage inflation, and that is what markets are sensing as well as the taper talk.
that so called "improvement" in labor market, is only possible if someone tries really, REALLY hard to see it... 200k -ish full time jobs lost, 300k-ish part time jobs created - hey presto, "we have increased jobs". Yeah, sure - lets make everyone work half time, we would DOUBLE the employment - according to the same logic...

I'd suggest to follow TrimTabs, ie Charles Bidermann on the YT - he is measuring real time, the net income increase of the whole nation (that accounts for tax increases as well - logically, if you are taxed X more, you are not going to spend X, ie the consumer-based economy gets hit). And according to his calculations, there's NO improvement of the job market at all

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Old 07-12-2013, 02:18 PM   #4
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News say there might be some trimming ahead in September - probably.
If that happens, I wouldn't like to see gold crash deeper...
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Old 07-12-2013, 02:19 PM   #5
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Jim Rogers says the correction could continue, but what if QE gets slashed? I'm afraid 1,000 $ might not be the lowest stop.
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Old 07-12-2013, 03:16 PM   #6
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Originally Posted by Potemkin View Post:
Jim Rogers says the correction could continue, but what if QE gets slashed? I'm afraid 1,000 $ might not be the lowest stop.


Bring on higher interest rates and see what happens. The interest expense on US debt will skyrocket and the US will look a lot more like Greece when it comes to it's budget. Only difference is, there wont be anyone to bail the US out.
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Old 07-12-2013, 05:39 PM   #7
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Originally Posted by Potemkin View Post:
Jim Rogers says the correction could continue, but what if QE gets slashed? I'm afraid 1,000 $ might not be the lowest stop.
If that happens there is only one thing to do. Buy more goofs and silver! !
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Old 07-13-2013, 08:46 AM   #8
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Originally Posted by marper View Post:
If that happens there is only one thing to do. Buy more goofs and silver! !
Obviously - as it gets cheaper, buy more! The only best time to buy PM's is when they're cheaper.
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