The more I look at these things the more I realise – as surely as night follows day – we are all being taken for the biggest ride you could possibly imagine. Think Red and Blue pills.
Throughout history there has always been an elite, then the upper classes, the middle, the poor. As if that’s the way it has to be.
Yet, it needn’t be but for the elite – who will NEVER give up their strength, power and massive privileges. You think they work? Every day is a party. Everyone else is paying for it. The next generation is paying for it. Maybe even the one after that.
Anyway, at 7pm GMT on the 18th Ben Bernanke, the outgoing Chairman of the US Federal Reserve, will announce on tapering Quantitative Easing or continuing as is.
Just over a year ago the Fed doubled to $1,000 Billions per annum that, in effect, the Fed was creating out of thin air – by borrowing from the next generation or even two – and handing to the elite of America and the world. Hence why (probably) equities are at the highest levels in history and bond prices similarly (though they’re down c 20% at this point).
Commodity prices were smoked for 2 to 2.5 years, as were Emerging Markets’ shares as vast funds flowed into the US, driving up, too, the US$.
The rest of the population, who did not have these equity and bond assets, have seen incomes fall and their assets not rise. Do you wonder why the rich are taxed on capital gains and the rest of us are taxed on income…?
So, what do we think is going to happen at 7pm? That is the wrong question.
Thinking (logically) can be damaging to your wealth. Logically, the $ should have been hammered with all the printing. Logically, commodities should have soared. Logically, Bonds should have tanked and interest rates gone stratospheric. Logically, stocks should have absolutely collapsed. None of that happened.
Most of what happened we forecasted and worked with. The main one we didn’t was equities – which have, of course, soared to all time highs.
Anyway, ‘thinking’ is sometimes the wrong thing to do. Expect the most unexpected thing when it comes to the 0.1% defending – with all their might – their might.
So, in May they said they would taper. We were highly skeptical. Everyone said they would. They didn’t.
I ask you. You are the outgoing Chairman (at the end of the month) and your replacement Janet Yellen, along with Obama, is thee biggest proponent of QE in the US. It is in Obama’s job spec to make the rich richer and to Hell with everyone (literally?). Also, if you taper the equity market will plunge and keep on plunging. You will lose out on all those $250,000 a speech bookings that you already have in your diary and the $5 Million a year consultancy you’re setting up. Oh, don’t forget the likely directorship at one of the top global #bankster organisations.
On top, are you going to go down in history as the guy who broke the system?
Taper of QE? I’ll believe it when I see it.
OK, there MAY be a small reduction but it will not be material, if at all. Also, IF it happens, it will not make the blindest bit of difference to anything. It will not be large enough to alter what the market is doing right now. What is the market doing?
It’s getting more interested in EM shares, gold and silver and US Treasuries (which I mentioned above have fallen somewhat from all time highs). Fact is they’re showing internal strengths. Whether or not they will rise after tomorrow (or more reasonably from week 2 2014 when the market gets over Santa Claus) we shall see. However I have written, previously, that we are thinking (uh oh!) they have strong potential for a major rally well into 2014. On verra.
IF they taper a bit be absolutely assured the amount of QE, within a few years, will make current mountainous levels seem like a small foothill.
BTW – who owns the Fed?
You Couldn’t Make It Up.