Courtesy of Mish.
In my previous post Desperation Bazooka Tactics; Gold Soars Following Huge Headfake, I mentioned “This seems like desperation bazooka tactics. Specifically, the Fed is in a panic state over jobs.“
I am not the only one to come to that conclusion. Saxo Bank economist Steen Jakobsen sent out a post moments ago, FED Did Panic……
They are now doing ‘open ended’ bond buying – no finite time or amount…hence this will go down as QE Extreme.
I remain of the view this is final phase…
I’m long stocks, gold, short us dollars next 24-48 hours but ..on the anniversary for LEHMAN… tonight could be the day where FED did too much.
Low yield and monetary policy stopped having an impact two years ago, tonight could be the night where after the rally low rates no longer impact stock and risky asset – the only cheap asset right now is: money …every time this has been the case in history it has ended in bubble and tears.
Congratulations to Steen for predicting this outcome today. On a podcast with Chris Martenson yesterday, both of us stated the Fed would not do much this month but would at some point panic.
Well, panic the Fed did, and sooner rather than later.
Mish Interview With Eric King
Last evening, I had the pleasure of chatting with Eric King for about an hour regarding the state of the global economy and how central bankers would react.
The results are on King World News in a post released today before the FOMC announcement: Global Economic Plunge, Money Creation & Soaring Gold
Today Mish warned King World News that investors should prepare, “… for a big plunge in economic growth worldwide.” Mish also said that despite the plunge in the global economy, “I expect to see gold breakout to the upside and I think we are starting to see that right now. The same thing is true for silver.”
But first, here is what Mish, who runs the Global Economic Analysis site, had to say regarding the plunge in economic activity: “We are seeing a decline in the global economy. China has slowed down dramatically, so any commodity exporters which export to China are slowing down as well. We’re already seeing this happen in countries like Australia. We are also starting to see the Australian housing market begin to crash.”
…
