In uncharted waters here, no one knows how this is going to play...

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Gunslinger27

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18/06/21

09:09

Post #: 53916018
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Originally posted by Dazedandconfused: ↑

The fundamentals actually haven't changed that much, the only difference in the Fed's announcement is the prospect of rate rises 2 years from now instead of 3 years.

It is the psychology which seems to be different.

In the last 3 months I have been doing well with gold stocks but they definitely topped out since the beginning of June. 2 days has taken 1/2 of the profit. At the same time the momentum of the market has also slowed. It seems all it took to reveal the underlying anxiety was a long distance threat of the Fed attempting to normalise things a bit.

Gold is getting sold down as I type... but I think that is going to be a short term phenomenon.

fwiw... I have spent weeks trying to understand the debate about 'transitory' inflation. The inflation is real... imo.

I boil it down to this underlying principle.

The growth in the money supply is exceeding the growth of the real economy. The degree by which the money supply outpaces the growth in the economy determines how severe the resulting inflation.

Today's Fed announcement is continuing QE .... the question is .... will it create sufficient growth? If the last 12 years are any guide the answer is no.

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In uncharted waters here, no one knows how this is going to play out.. including the FED.
This Bob Kendall guy is worth a listen, particularly the market commentary section at the beginning.
3 Upvote

0 Great analysis

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