Hi Salt,
Who on earth would imagine the US public would swallow the philosophy that a way to fix a problem is more of the same thing that caused the problem.
Goldman and JP Morgan donating $150,000,000 to Obamas presidential nomination guaranteed a sympathetic ear.
The fed raising rates will add to the instability, but the longer they don't the worse it will get.
They are painted into a corner.
They cant devalue, without going negative on interest rates.
If they raise rates they will appreciate the currency, in a world of devaluation hurt.
Both = bad news for holders of US treasuries Bonds. A flight form which will be catastrophic any hint of this in the past has led to another round of QE.
I have said for a while now there will be a US currency crisis and here it is, but it is only just beginning and its not the only game in town.
Any raising of rates will also add to the woes of the debt driven overvalued US stock market, which is due for a correction of at least the same magnitude in an equal and opposite direction to the debt it is saturated with, unless rates go negative.
Panic is in the air.
They have flushed money out of, savings, pension funds, gold, ETF commodities trading and oil into the market and into US treasuries bonds.
They have tried all of the tricks in the book, remember Japan 1990 and the lost two and a half decades since, the USA and most of the world are following suite, but they only just started.
Once rates rise any shmucks who are not first to get out of US treasuries will be stuck in a market that has no liquidity, so it is a hair trigger situation waiting to happen.
But treasuries or gold is where they hide in times of instability.
At some point there are no new avenues to push any more debt, the market is saturated with debt, governments are saturated with debt, people are saturated with debt.
All of the bullets have been fired and a perfect world financial storm is brewing, but no single entity is in control and they now have opposite or out of sync interests. to the worlds largest economy.
China is also showing that it is big enough now to not get pushed around.
As I speak we are just shy of a $1600 AU and @ $1,164 US GP , amazing if you look back a week particularly in AU$ terms.
Regards Mark H
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