The US FED is at WAR with the EURO. {You are correct} They ARE flooding the market with US Dollars. In doing that they have undermined the US economy, by subtended M2 increased rates. This has created an artifically low bond yields against FED repurchase rate. This negative spread is a majour sign of over stimulation of M2.
Now the US fed is at the point that economics dictate a lowering of the FED rates, against an increasing disinflation {deflation soon} rate. But I suspect you will see Greenspan and gang, raise rates, and make the USD even more desirable. This is why, way back, that I said rates would rise... {A negative yield curve, which we all now is unstable?}
This will push the US into a deflation stance, and many more countries over the edge. US Fed's attempt to control market share of the world currencies, could end up causing a backlash against the USD and a demand for a standardize WORLD currency.
Since markets are BASED on Yields & Growth, and the yiields are artifically low now {higher later}. Plus the growth rates may become increasing less. Than a majour selloff of US equities, may result in a flight to the Euro, and away from US bonds. And THAN the POG may rise?
Volatatilty which is high, will get larger soon. US FED is the reason, they caused ALL the markets problems. All because they want that Euro to fail.
Sidebar: This is why Canada, Italy, Australia, and many others have sold their GOLD. This is the reason WHY Gold has dropped in price. And this is why it seems stable in an ongoing world currency crisis. All the above mentioned coutries work off of derivative market models that a long time ago pointed to US FED M2 increases. If Commodity driven countries such as Canada, the GOLD portion of the Canadaian currency would keep the Canadian dollar artifically higher than what the Canadian economy can handle. Thus the gold holding would push Canada into a recession a long time ago. Thus the devaluation of the currencies... And this is why HK/China have sufferd. {Pegs don't work}
This is why over a year ago I pointed out that M2 increase was at to high of a rate. {I'll look for the quote, It's on SI, somewhere}
PS: Don't get faked out by the markets, they are grossly over valued still.
"Remember what he said a couple of months ago, people have forgotten to look at money supply?"
I've never forgotten... Remeber I quoted that a long time ago?
It just is not going to work!!!
PS: Please forgive my spelling errors, I had little time to write this, as I read it late.
Gold to be mentioned on cnbc in the next hour. |
