Commodity Trade Mantra

Posts Tagged ‘Interest Rate Policy’

If the Fed does What it Wants to, the Result will be the Opposite of What it Wants

The US economy is slowing perceptively. What should the Fed be doing? They might want to cut interest rates. Problem. Another tool in the arsenal – cheapen the US dollar. Again there is a problem. Whether that works & what is a good idea are separate issues. Certainly a rate hike would take the stock market down 20%. It’s going to be just the opposite of what the Fed wants.

Why Goldman Is Suddenly Warning About A "Large Drop" In The Market

After recent bearish conversions by the JPM, BofA, Citi & UBS, the only bank that steadfastly held a bullish view on stocks during the recent market squeeze higher was Goldman Sachs. Not any more. With 80% of fund managers underperforming, the probability of irrational capital allocations increases & as a result there is a reasonably high probability of a large drop in the S&P500.

Why Investors See Higher Gold Prices In 2016 - Here Are Six Reasons

Precious metals remain the 2016 commodity leaders, with silver posting a huge 25% gain & gold prices showing a 21% rise. The year is off to a good start for gold investors. But, the party may have just begun. A bevy of economic, monetary, currency and technical factors continue to develop in gold’s favor, which argue for the potential for higher gold prices in 2016.

Crude Oil Bust Could End The US Dollar Domination

With Bretton Woods’collapse in 1971, oil became its new saviour and kingmaker as the U.S. dollar became the prime currency for crude oil transactions. The current strength of the U.S. dollar shouldn’t be taken for granted. Although a viable alternative to the U.S. dollar has yet to be found, the petro-dollar is vulnerable in the long-term, and perhaps even in the medium-term.

Got Gold And Ready For The Next Bear Market?

Given the run-up in equity prices in recent years, we wouldn’t be surprised if the looming bear market, if it indeed becomes one, will last at least as long as historic bear markets. Are we already in a bear market in stocks? In this context, we study past bear markets to see whether gold may serve as a valuable diversifier for what’s ahead. Got gold?

The Dollar Will Not Be Overthrown in October (Part II)

The Fed’s talk about raising interest rates is making the dollar stronger, but it’s also making the yuan stronger due to the peg. China has to tighten its monetary policy by buying yuan & selling dollars to maintain the peg, at a time when China is slowing & should be easing, not tightening, policy. So finally, China threw in the towel and broke the peg to the dollar on August 11.

What Is The Federal Reserve System?

Spending time to understand the ins and outs of the Federal Reserve will give you a significant financial edge. Paying attention to and understanding the Federal Reserve System is more critical to your investments now than in the past decade. Well, everything you need to understand the Federal Reserve is right here at your fingertips.

The Strong Dollar Could Turn on a Dime

Right now capital is flowing into the United States, away from these other countries, partly because the expectation of stronger growth and stronger rates. That’s why the dollar is stronger today. But will US rates actually go up in 2015? If no, and I believe it is so, then the current strong dollar trend could turn violently on a dime.

Bond Market is taking Advantage of Janet Yellen`s Dovishness

Policymakers have in the past always been mindful to at least talk the market out of being so blatantly one-sided as is so common for Wall Street. Get more Hawkish Yellen, & start at Jackson Hole, as bond market traders are already discounting this speech once again. In short they are taking advantage of your dovishness!

The China Bubble is Bursting: James Rickards

Amid weaker U.S. growth and volatility in capital markets, China stands out as a beacon in the minds of many investors. China growth story is one that investors take for granted, but are in for a rude awakening when they realize how much of the story is false & how quickly it may come unraveled.

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