Wednesday, September 12, 2012

QE Whatever

Are the markets expecting another round of quantitative easing?  Or are they just experiencing the massive devaluation of the fiat currencies of the world?  Either way prices have risen dramatically in the last couple months.  Oil is up and precious metals have made a move we have been expecting for a couple months. 

Tomorrow Bernanke will open his mouth.  No one knows what he will say.  He has been leaning towards announcing further easing of monetary policy but who knows if tomorrow will be the day it is announced.  We should note that policy is currently easy as POMO operations and Operation Twist 2 continue.  This is keeping their low interest policy in line.  This is important so the UST can continue to pay the interest on the debt.  When rates rise then the UST is bankrupt and the Fiat Ponzi, on the back of the dollar, ends.

I wrote awhile ago that precious metals would begin to move up in July.  They did.  Now they are back in the middle of the long term range.  This is a great time for them to consolidate.  1740 has held for a few days now and is poised for another move higher.  I think we will see $1900 in the next month.  Silver is also in the middle of its range and I think we will see $40 by the end of the month.

The future will see both metals double after that.  The whole financial and economic structure is completely unstable.  Fiat currencie has over saturated finance.  The bond market is subject to collapse due to artificial demand from the Fed.  These two sectors are killing each other:  the Fed prints dollars to buy bonds but the bonds lose value due to the ever inflating dollar.  This is creating a dissenence not ever seen before in finance.

Whatever happens tomorrow will not matter in the long run.  In the end gold and silver is money and the Fiat Ponzi will fail.

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