It looks like for now at least, the play was indeed buy the (tapering) news in bonds. 7-10 Year… 20+ year… Have a nice weekend. For “best of breed” top down analysis of all major markets, subscribe to NFTRH Premium, which includes an in-depth weekly market report, detailed market updates and NFTRH+ dynamic updates and chart/trade setup ideas. Subscribe by PayPal or credit card using … Continue reading Bonds: Buy the news
Fed talks taper “Looking ahead, most participants noted that, provided that the economy were to evolve broadly as they anticipated, they judged that it could be appropriate to start reducing the pace of asset purchases this year,” the minutes stated, adding that the economy had reached its goal on inflation and was “close to being satisfied” with the progress of job growth. However, committee members … Continue reading FOMC: Here’s the Munny line…
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.
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.
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.
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 the guard at the Fed, that is. Alan Greenspan oversaw the making of a stock bubble in the final phase of the great bull market ended in 2000. He then instigated a credit bubble, which … Continue reading Hand Off to a New Fed Chair is Well Timed