Joined Apr 1, 2010
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Is “she” hawkish? The question answers itself. When it comes to business, women are the ultimate pragmatists. Women by nature, are not cowards. Any risk in here, is Yellen to be more hawkish then suspected. I speculate most will be quite surprised how well the stock market handles hawkish tapers, it is time to unwind.
I’m expecting gold to put in a strong rally this year, although not until mid summer at the earliest. Slightly inclining sideways chop is expected in long term bottoming processes yes?
She, or they lol, had to address the screaming commodity prices. That was really going to hurt bottom lines because their isn’t wage growth for the masses. Will it be mostly talk remains to be seen.
I’m sure if good does take that line in the sand out it will happen overnight with a huge coordinated gap below…
Gold that is
FED is getting some pressure from global trade partners to unwind the money printing. The world isn’t as unilateral as it once was, and the US printing its way out will not be tolerated long term. Money printing was OK for a few years to stabilize the system, as it was in everyone’s interest. However, since 2008/2009 China, Russia and others have increased bilateral trade agreements in local currency to decrease dollar/treasury dependence. As soon as they don’t need the dollar to settle global trade (ie alternative systems in place), they will start playing hardball. We may be getting close to that point. FED knows if they stop printing the music stops, but for now, they have to try. Once treasury rates back up, domestic politics will trump geopolitics and they will step on the gas again and ramp up QE. Then, gold makes new highs and the treasury market sells off as trade partners walk the walk out of dollar/treasury assets. That’s the road-map. As always, timing is everything. The footprints in the gold/treasury market will be too big to miss for those paying close attention.
I suspect Yellen will have to walk back her tightening stance but I doubt it will happen until the markets force her hand via far more financial market weakness then we’ve seen so far. How that initial financial market weakness would effect gold and the miners I have no idea although further selling in gold would appear the most likely scenario along with a potential for one final washout in gold. As for me, since right or wrong I continue to hold the position that 1900 was A high but not THE high, I’ll hold a somewhat small position in miners now and wait to see how things develop and how gold would react to more serious financial weakness and see if in fact one final washout increases or decreases in its likelihood.
until massive global debt clocks reverse,growth will be 2%vs6%.price inflation has started rolling through commodities which will lead to workers demanding more wages to pay for stuff.wage and price inflation lower profits until debt comes down and capex reappears because the money stays in economy insteading of going to taxes to service debt which of course lessens demand for QE/govt.controlled treasury auctions(money printing).gold went up because of first QE’s but QE has dimishing returns and during that phase gold comes down.the new catalyst for gold then becomes the transition from low dollar to slow growth and inflation which pushes gold back up.months go by of indecision and choppy slop as the factors to which gold respons actually get traction.right now the technicals are aligning with the still low dollar,still low rates but transisting to the growth slowing,inflation accelerating phase that is unfolding.I think Chess’s excellent technicals will act as a smoothing mechanism as new factors move to front of the line to affect gold price. market is frontrunning the change.not a big reason rates should rise now with growth slow.that will come later and likely so slowly for a couple years that gold can go up for other reasons. much more to say but don’t want to write a book.good luck. i will trade gold chop and happily jump on bigger trend when i see it.
Thanks, everyone!