Some tough new out of Japan here this evening for those fans of “money printing” and “easy money” policy. News flash – It’s not working.
With the current QE program in Japan currently 3X LARGER than that of the U.S Federal Reserve, the first 6 months “pump job” has most certainly stalled out ( ironically in May – as I suggested markets topped then ) then traded flat across the summer, and now into the fall.
If you can believe it:
“The BOJ is likely to step up stimulus in the April-June quarter to support the economy after the levy rise, according to 20 of the economists surveyed.”
“The BOJ will need to fire another arrow aimed at devaluing the yen if the Abe administration is unwilling to risk a sharp economic slowdown,” Credit Suisse Group AG economists Hiromichi Shirakawa and Takashi Shiono wrote in a report.
Expect lower stock prices in Nikkei, then further easing come April.
Now do some of you have a better idea as to why I expect the Fed to also INCREASE QE moving forward?? The numbers are just too large for any of us to clearly understand. A couple more “zero’s” on the Fed’s balance sheet aren’t going to make a single bit of difference as financial markets continue “hanging by a life line/thread”.
They will print, print, print until they can’t print anymore – and continue kicking the can hoping for a miracle.
Japan’s program is 3X larger than the U.S and it’s already “a given” they will increase QE with continued attempt to prop up the economy. This, in the face of “global growth projections” now being lowered by the IMF and anyone else with half a brain in their head.
I’ll say it again – keep your eyes peeled friends…..a bumpy road ahead.
Hey Kong….. USD looks to have topped out Friday – Still have my weekly fire tech allocating a move lower….. looks like this was a bounce off over-sold conditions…… Next week should provide this clarity needed….. starting this Thursday… 🙂
Cheers Schmed…
I guess I’m moving a lil more on the lower time frames as…I’d hate to have been on the wrong side of that USD move!
It’s a powerful move out of such an area of support…and perhaps we get a day more pullback…or perhaps not!
I’m watching like a hawk, for my re entries against most everything under the sun – long USD.
I’m planning for considerabely higher before lower.
it’s just a matter of time till BOOM
I really hope when FED announces increase of QE it will shock the market and all believers in tapering.
And I will be ready with buy orders for gold and silver 🙂 …this could be finally the turning point for precious metals.
But right now I’m worrying about my long positions XAG/USD @ 19.60 ….don’t want to see silver drop below 20 again.
Kong, what is your view on precious metals? are you waiting for double bottom in gold?
And thanks for you emails, you are helping a lot.
My current trade plan centers on continued strength in USD so yes I am staying out of Precious Metals until the dollar run is exhausted.
this “should” put us in a very interesting place with respect to Gold with several other fundamental factors coming into play.
We’ll have to see how far USD stretches and take the turn “when she comes”!
Much as it is against common sense I’ve gone LONG the AUD/JPY and an in profit long NZD/USD