Paper shufflers have been beating the grass the startle the snakes (weak hands) because investors, reluctant to do their own homework, have a tendency to act based on emotions rather than intellectual discipline. While intellectual discipline recognizes fundamental-driven secular bulls, it’s easily overridden by emotions of the short-term trend. For example, a sharp decline in gold causes investors to become fearful. This fear makes investors reluctant to buy. This tips the scale towards selling. Falling prices reinforce growing fears, such as what if I am wrong? This new and intensifying fear, in turn, supports further declines. This describes a classic short-term fear cycle. The paper shufflers know and use it to control the trend.
The paper shufflers following historical precedence have been using the fear to reposition on the long side into weakness. The silver and oil markets illustrate this price management tactic.
Policies makes will choose to kick the can down the road, because it’s either kick the economic can or get their cans kicked. The choice is obvious.
“The problem is so serious, the problem is so present time, the problem is so real that it has inherent in it the probability that the economy is not going to have a significant recovery for more than a decade. And the standard of living in the United States, the standard of many who are reading this now, especially those who have taken no measures whatsoever to protect themselves, who simply look at it as reading something of interest but not really acting on it, is going to be so significantly impacted as to make the middle-class or higher middle-class join the serf class. This is as serious as it gets.
...This has gone so far that there is no solution that can be applied and the only practical method is to continue to expand their (the Fed’s) monetary aggregates to continue to hold down interest rates. And hopefully kicking the can down the road until somebody else is in charge and that’s exactly what they are doing.
Well let’s just assume for a moment that QE is in fact limited to June 30th and let’s assume for a moment that the central bank of the United States would take a conservative restrictive approach towards monetary policy, I would suggest to you that the stock market would peel off 4,000 points so fast you would get wind burns. I suggest that if anything like that happened exposing the balance sheets of the financial institutions, that you would have to return to QE with a vengeance, unparalleled, unprecedented in history....
Source: kingworldnews.com
