RMS 0.79% $1.91 ramelius resources limited

gold correction target $1, page-29

  1. 1,238 Posts.
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    You posted: "USA will rebound if they do another QE. but they have run out of money."

    How does the US Treasury "run out of money"? As you know, the US$ is no longer redeemable in gold, so the Treasury simply 'prints' more.

    The Fed is going to 'blink'. Yearly interest on the $30.5 trillion national debt is $924 billion, just at the 2-year Treasury's current 3.303% (up from 0.15%, a year ago). For perspective, the US Dept of 'Defense' 2022 requested budget is $773 billion (largest discretionary spending in our budget).

    FWIW, my guess as to when the Fed blinks, was that they'll wait until they wound what is currently the first decent blue-collar job market since the late 1990s. However, others guess the Fed will blink when one of the big US banks, or one of the G7 central banks, goes under.

    IMO, "quantitative tightening", which just began this month, is going to have a much bigger effect, than rate raises. The Fed is withdrawing $47.5 billion/month in liquidity, 4.75X the rate they used the only other time QT has been done, back in 2018/9. Back then, it cause the overnight repo market to freeze up (no lending).

    But whether one guesses QT be stronger medicine than rate raises (to the still laughably-low 1-4% range), there's plenty of evidence that the Fed is tightening just as the US economy was already falling sharply. The University of Michigan Consumer Sentiment Index for June just checked in, at the lowest ever, on records going back to 1980*. The average 30-year mortgage is sailing past 6%; it was 3% at the start of the year, and 2.77% last August.

    The Fed will 'blink', IMO, and then commodities and gold IMO will move substantially higher. This is not investment advice, and I am not an investment professional. I am a naive moron. Please do your own due diligence.

    * https://www.morningstar.com/news/dow-jones/202206105747/us-consumer-sentiment-fell-in-june-to-its-lowest-level-ever-university-of-michigan
    ** https://www.cnbc.com/video/2022/06/13/30-year-mortgage-passes-6percent.html https://fred.stlouisfed.org/series/MORTGAGE30USMy



 
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