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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: elmatador who wrote (187411)12/23/2014 8:55:52 AM
From: robert b furman7 Recommendations

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Hi Elmatador,

Bernanke pretty much called the QE as a way of reducing ones currency to make that countries products more competitive.

We sure did it in the USA.

As QE 4 was being phased out, dollar strength came in.

It is a balance between countries.

Each fighting to keep their people working.

The globalization has created this deflation.

No one stopped to think that the next new plant in China - armed with cheap labor was creating global excess capacity.

It was used to kill the unions who did not look beyond physical borders.

Now we are surprised when the wage growth stalls - duh.

One other good benefit for us is less pollution - we exported that to China.

The bottom line is as QE is embraced else where the currency of that country will decline.

Its pretty simple - when a country has debt that exceeds it GDP - it's ability to repay debt is questioned - thus a higher yields must be paid on the debt instruments issued and bought by the central bank, which - builds its balance sheet.

That risk and higher yield reflects on the currency as less valuable - the desired affect of QE.

As the Euro declines our equity market gains.

Money flows out of weak currencies to equity markets who have solid currencies.

Watch the euro - as it fails the US equity market shall thrive.

Bob
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