Commodity Trade Mantra

Posts Tagged ‘Tapering’

Federal Reserve Policies Cause Booms and Busts

Federal Reserve monetary expansion & artificially low interest rates generated wide imbalances between investment & housing borrowing on the one hand & low levels of real savings in the economy on the other. It was inevitable that reality of scarcity would finally catch up with all these mismatches between market supplies & demands.

Jackson Hole: 'Tremendous' Downside Risks If Yellen Doesn't Go Full-Dovish

The 3 ways Yellen can be dovish. Full dovish goes beyond anything she has stated explicitly in her comments. Semi dovish may generate a strong initial market reaction if it looks as if it is introducing new factors into policy equation but is much more ambiguous. Contingent dovish is the argument she has put forward for a long time.

Tapering Is Good for Gold

Gold prices fell lot in 2013, but quantitative easing was still going strong then. The Fed’s reduction of QE from 85 billion to $35 billion per month indicates that banks are becoming healthier, which means they will begin to push money out into the broad economy. Inflation would result – which is a gold positive.

Gold likely to reach Four-Year Low in 2014

Metals Focus Consultancy: Gold prices have probably peaked this year and could sink to their lowest since 2010 at $1,100 an ounce as the US economic recovery gathers pace. Western investors tend to set the price, while physical markets react to it. Also expect silver prices to average just under $20 an ounce this year.

Asset Purchases By The US Fed And The S&P 500

Periods where the Fed was buying bonds have seen stocks rally, whereas periods where the Fed was not actively purchasing bonds saw two of the largest pullbacks for the S&P 500 during this bull market – proving a historical correlation between increases in the Fed’s balance sheet & the S&P 500.

The Global Economic Crisis Is Starting To Catch Fire

After a brief period of relative calm, we are beginning to see signs of Global Economic Crisis & financial instability that are unlike anything that we have witnessed since the financial crisis of 2008 – Just open up your eyes and look around.

Goldman's 5 Key Questions For Janet Yellen

Fed Chair Janet Yellen is likely to stick to the script in her inaugural monetary policy testimony but Goldman looks for additional color on: 1) Recent patch of softer data 2) Fed’s thinking on EM weakness 3) Hurdle for stopping taper 4) Amount of slack in labor market 5) Future of forward guidance

Gold And Silver Prices Poised To Rise Dramatically

Gold and silver production remain flat, but fiat currency production is rampant. It’s plain economic logic that, in an uncompromised market, the prices of gold and silver should be rising, also considering that all of the world’s physical gold and silver is being purchased & increasingly hoarded in Asia.

The US Economy Is Growing Much Slower Than You Think …

Spending the savings or take on more debt makes a new kind of growth today: The more you grow, the poorer you get. The economy used to grow by making people wealthier. Now, consumers go further into debt, while their incomes are stagnant or falling.

Emerging Markets, Interest Rates and Tapering

Having added unprecedented amounts of liquidity into its own economy through QE, the Fed is now reducing the pace of its expansion of narrow money. This is bad news for emerging market countries, who will surely conclude that international monetary co-operation has broken down.

Paul Singer

If the economy does not light up, the impact of another year of full-bore QE is impossible to predict. Five years and $4 trillion have created economic and moral distortions but very little sustainable value. Maybe the sixth year will produce the “riot point.” Nobody knows, including the Fed.

A Central Banker Has A "License To Lie’

To mislead investors is actually a key skill required by a central banker’s job description. Revealing the true state of national finances at a time when a devaluation or comparable financial crisis is looming might be to guarantee the loss of the central bank’s entire reserves.

Two Reasons On Why The Fed Is Tapering

Why is the Fed Tapering? Perhaps the Fed understands that a dollar crisis is a bigger crisis than a bank crisis and that its bailout of the banks is undermining the dollar. The question is: will the Fed let the banks go in order to save the dollar?

What they say on Wall Street - Don’t Fight the Fed

Simply Google what they say on Wall Street – “Don’t fight the Fed,” and you’ll get 468 million results. Does the Fed Really Create the Boom-Bust Cycle? When the Fed is printing, get your money in stocks. When they take away the punchbowl, turn out the lights and sell your stocks—the party’s over.

Gold Price Exploding In Emerging Markets

The reason for the emerging market turmoil is the capital flight out of those markets, directly linked to the tapering fear from the US Federal Reserve. Gold is the ultimate protection against the central banking illusion which is why we advocate holding physical gold outside the banking system.

China Peer-To-Peer Lending Bubble Bursts - 90% Companies May Default

According to research by Celent consultancy, the P2P lending market in China grew from $30m in 2009 to $940m in 2012 and is on track to reach $7.8bn by 2015 – Here’s the problem: it won’t. Dozens of the P2P lending websites went bankrupt and have shut as borrowers default on loans.

The Long and the Short of Gold Investing

There are two types of gold investors: those trying to make money on short-term market timing and those looking for long-term asset preservation – Finishing 2013 down 28% seems to have sealed its fate in the eyes of the short-term speculators.

China Bails Out Money Markets Following Repo Rate Blow Out

China said it injected over 300 billion yuan ($49.2 billion) into the nation’s money markets over a three-day period as interbank interest rates surged to their highest levels since June – Perhaps the PBOC hinting at tapering at a time when the Fed is actually doing so is not the smart choice…

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