Previous articles and posts of interest.
Last week the Fed treated us to a whipsaw as market perceptions apparently were not in line with the FOMC policy statement, which was basically a punt. Then the very next day the Fed’s James Bullard jawboned the media about a possible October Federal Reserve tapering. Hence, a letter writer was left with images of a 3 ring circus heading into the weekend. From the opening segment of the September 22 edition of Notes From the Rabbit Hole:
Last week’s opening title was ‘Get Ready for a Climax to the ‘Taper’ Hype’ and boy did it ever climax. The FOMC rolled over and the market over reacted. Everybody it seems (bears, bulls, inflationists, deflationists, gold bugs; everybody) was punished at one point or another. James Bullard even had the nerve to get in front of a microphone and exercise his jawbone about a possible October ‘taper’ and the anti-climax was on.
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In the current policy and media stoked market environment, anything is possible. It’s the wonderful, magical world of hands-on policy making. 5 years after the financial crisis, but still not enjoying a ramping economy like the good old (and long gone) days of the last great secular bull market (RIP 2000)? Just sit back, relax and let the man in charge control the image.
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The media love to get a hold of buzz words and then give them a spin and a life all their own. Recent examples were the mainstream media’s presentation of ‘Operation Twist’ – which was simply an official yield curve manipulation designed to sanitize and dampen inflationary signals – as an inflationary operation, and the ‘Fiscal Cliff’ drama that sent herds of conventional investors to the sidelines* when they should have been contrarian (and bullish) back in Q4, 2012.
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The world expects the FOMC to update its expectations regarding a tapering of Treasury bond asset purchases tomorrow. The world thinks that a tapering of these purchases would be bad for gold.
I think a decrease in T bond purchases would be anything from neutral to a potential positive (see post coming later today on the matter). Regardless, it is time to be looking out beyond FOMC with regard to the precious metals, a most sensitive sector to monetary policy.
So here is a check list of what we want to see in order to press the bull stance.
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As noted, this week's letter was a difficult one because it raised a lot of questions, many of which seem to have opposite implications. Going forward I will try to…
Here is the chart we have been using in NFTRH, showing inflation protected T bond fund TIP vs. regular T bond fund TLT. This ratio has been bottoming for months…
The destruction culminating in late June in the gold price brought out the usual suspects to school us ever since about why gold is all done as a worthy investment…
Last week the Silver-Gold ratio (SGR) failed to get with the bear memo as the sector got a hard shakeout, and look what happened. This week through the ups and…
Excerpted from NFTRH 250 (August 4, 2013) Momentum: the quantity of motion of a moving body, measured as a product of its mass and velocity. the impetus and driving force…
We have used the 'continuum' (monthly chart of the 30 year yield) for years now to define tops in inflation expectations (red arrows at or around the EMA 100) and…
It is as notable as a 2nd term president handing off the big problems to the next guy, as George Bush did with Barack Obama in 2008; the changing of…
Yesterday was an impulsive looking move and something of a statement in itself. But now technically, the metals and miners need to gather themselves (after a potential pullback on profit…
[edit] Formatting errors have been corrected from an original version posted earlier. The following is excerpted from this week's Notes From the Rabbit Hole, NFTRH 247: As the 10-year to…
Risk is OFF [ed: 'Risk Off' might seem obvious this morning, but NFTRH has been highlighting acute risk in the US stock market since leading indicators - including a sentiment…
