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Silver Wheaton Corp. Message Board

  • mardermj mardermj Aug 21, 2013 3:56 AM Flag

    Stand by as the market scares itself with one month old tapering FOMC talk.

    Tapering will make bonds attractive to foreign investors, and May showed China and Japan walking away from US bond buys, Bernookie can't let that continue. Real estate will show increased sales and prices end of week, new home sales may flatten a bit, but that news later this week reflects a two month time lag between home price reductions and sales reductions in higher interest rate environments-that-ALWAYS- happens when mortgage rates rise no matter what the rationale for making that happen, or good or bad intentions. This is second grade math folks.

    End the Fed? Sure. QE a fiasco to save undeserving banks that defrauded us? No doubt.

    But QE is like the Alien face hugger-just TALK about removing it, it winds itself tighter around the economies neck. Remove it, the victim, the economy, dies. Leave it alone, the economy limps along until a chest bursting alien called "inflation" emerges to kill us all.

    Not pretty, no?

    Newt: My mommy always said there were no monsters - no real ones - but there are.
    Ripley: Yes, there are, aren't there?
    Newt: Why do they tell little kids that?
    Ripley: Most of the time it's true.
    Aliens (1986), one year before the flash crash of 1987.

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    • Gang, the real estate sales numbers were blowouts, but, for the tenth week in a row, new loans and refis fell off the end of the earth--it's going to take about two months for that halt to make it to Mr Market. In the meantime we get to replay the July Meeting notes of the FOMC as if we expect the alternate ending DVD version--when we know, if nobody but US is buying bonds, those yields have to go up and prices down. That means the Fed has to back away from buying and that also means, the market discounts that kind of action IMMEDIATELY.

      The economy is as strong as the Fed can make it, without the Fed, we rely on corporate America to squeeze even tighter, job growth unless stimulated by Congress by some taxation action or incentive, is going to go into the toilet. Obama becomes an official lame duck shortly. About the most he can do is delay Obamacare to 2016--and a bunch already comes into play biting profits in the #$%$ for the forseeable future.

    • But, what if the Fed minutes reflect uncertainty about the economy and add a new wrinkle;
      More emphasis on tying tapering timing to reducing the UE rate?

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