Vi, it is a tight rope walk. i can tell you that the "green shoots" BS stopped cold when mortgage rates spiked to 6%. the fed has lots of power, but not that much. the US has more credibility than zimbabwe or argentina, which is why it still floats. our debt to GDP is worse than argentina's before it collapsed.
the difference between zimbabwe and the US is that our government prints money and gives it to about 10 people who put it in a safe and lock it. in zimbabwe, they print money to pay daily bills. we will get there, but it isn't next month. a market crash might occur next month, though, and gold has been falling with the market. it is now going up with the market. T yields are up today, too - which is important when you are financing $3.5 trillion.
iow, i think the fed wants the market down as that lowers borrowing costs on $3.5 trillion, hence all the "it's fine, but it will be a long recovery" noise instead of "look, a green shoot!" crap.
they don't want the market crashing, of course, but a down market and low rates are sanctioned by the government while a hot stock market and high rates will be attacked and attacked hard.
the visceral response to a down market is deflation and that has been taking gold down. it will absolutely change at some point, but i'm going with what is happening right now. if i'm wrong, i miss out on a 10% move at worst. if i'm right, i'm buying gold, silver and miners at low prices ahead of the explosion. |
