I disagree. No taper, no increasing rates. When the proverbial will hit the fan it will be too late and the Fed will not know what to do.
I am saying "may be" and not "will be", because nothing is sure, and because my opinion is based on psychology which is not an exact science. My theory is that the Fed is terrified that tapering will result in an economic crash and is under the illusion that after all it is harmless.
There is only one more wash out period for the metals. Difficult to say but January should be the bottom. Keep your faith in the long range gold will be $5000, $10,000 an ounce. The real bubble is the paper money.
Although I am always open minded and I know I could be wrong, I think that a clear picture is shaping up. Central banks, contrary to what everybody thought, instead of decreasing are accelerating QE. This creates both a short term and long term trend. The short term trend is bullish for equities as the consequences of QE are not apparent. The long term trend is bullish for gold when it will appear obvious that all this will result in currency depreciation. The bear market in gold is not dead, but it is moribund.
Respectfully it is nonsense. The idea that these people can predict things is ludicrous. The world is full of wrong predictions. It is complicated, but at the same time very simple. The pumping of money by the central banks coupled with decreased lending by private banks in a zero interest rates makes deflationary/inflationary forces cancel each other and create the illusion of financial stability and growth, which fuels the stock market and destroys gold. But it is an illusion, as neither exist. Gold is still in a bear market and may have another 10% down but exactly in 2014 it will start a new leg in its bull market.
I do not think that private debt is down (I may be wrong). Private debt is certainly up and keeps growing. However the low wages and high unemployment are keeping a lid on prices and, indirectly, boosting up the value of currency. What I am saying is that this is is an artificial way of boosting the currency. And something will give at a certain point.
This is my theory which of course can be wrong. The Fed is printing money and some of it goes to the people but not enough to cause inflation. Of course this increases the debt. Everything is well until the debt does not need to be paid and people accept a currency which exists only because of printing money. At a certain point something will give. I think that your final phrase is very telling: huge amounts of debt .. may drag on future consumption. But if this happens the economy and the stock market which are based on consumption will crash. So they have to keep printing money to make consumption go. Only two things are against this scenario, fracking and great harvest this year which are pushing down oil and food prices.
Goldman Sachs said that as the economy improves commodity and gold prices will fall next year. Why is the economy improving? Because of money printing. So money printing will bring prices down. This is the craziest thing I ever heard. Brace yourself for a huge currency devaluation by 2005.
Ihave changed my mind often. The capitulation process is very complicated. Miners for once are producing gold at record levels with a low gold price just to stay afloat. So there are many factors affecting capitulation. But a currency crisis is unavoidable.
Apparently gold miners are increasing the production of gold. This is somewhat surprising, but not completely. To stay afloat they are mining the highest grade ore and getting some income from the spread between cost and production around $100-200/oz at this levels. This will continue into 2014 and possibly reverse in 2015 as higher grade ore becomes less available. To me this changes the equation and explains the behavior of gold. It suggests that the bottom for gold will not occur for another 6 months. Miners will be hard to predict because they will produce more gold now that the price is low and less when, inevitably, the price will go up. This is a very important development and is changing completely my investment strategy.