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Topic: The Fed  (Read 416 times) previous topic - next topic

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  • Erich 
  • [*][*][*][*]
The Fed
Not sure if the market was expecting a rate cut? I know I wasn't. Bear market for PMs at least for a while.
New 52 week lows for CDE and HL with more to follow. I am greatly reduced and have added to my GBTC position.
I seems to be the only thing working in the alternate space. GLTA ER

Nikko: I believe I am going to win our bet

Re: The Fed
Reply #1
Fed continues forward with QT as the balance sheet is now $3.89 trillion, down from nearly $4.5 trillion. To put that in perspective the balance sheet has shrunk by some $2,000 per person in the country. While the plan is to stop QT in the fall, I think they should continue if possible as that is shrinking the fiat in circulation and returning more free market input into debt market price discovery. It is also one reason official inflation remains low.
We had a good headline jobs report, but all is not so shiny as 900,000 left the work force and many of the new jobs are in wealth consuming sectors. Also, the Fed is nervous about the economy, not just the market, as their comments are full of squirmy non committal phrases. There are many other signs of a weak economy so tightening in any form will likely give way to easing, positive for PM's.
The next round of easing will be less effective. One reason is easing is designed to promote more debt, but debt brings economic activity forward at the expense of future economic activity. We are in that future with the huge recent runup in past debt. If making it possible to take on more debt works another time, then the future correction measures will only be more severe.