At least we've got something to chew on today. Has anyone made any preparations for the chance the fed announcement may break something loose? I'll share what I've done. I went back into my portfolio and set a number of buy orders in things I want to pick up. Most of them will need a 9% fall in prices to trigger a purchase.
Tastes awfully bitter, tough to chew and bad for my health! I'm still reviewing your last message to see if I can put some math and understanding of risk to it all. I've been really good at reading the long term market trajectory in the last 10 years. Maybe together we can put the Hunt Brothers to shame (and avoid jail!). I've made my moves. I've doubled down on raw PM purchases in the last couple months, was able to play the correction (out at DOW +18k and back in at DOW +15k). Right now I'm unfortunately in a sit and wait mode with no plan of action. The way the news is playing out - this probably has better coverage in Vegas than the football games on Sunday.
I'd like to start seeing effective interest rates on savings again. I think we have now produced an entire generation of people that have zero expectation of a cash account's appreciation.
They decided not to hike rates about 5 minutes ago, so that might explain it: http://www.theguardian.com/business...erest-rate-decision-markets-janet-yellen-live Silver went from $5 to $5.20 in about 3 minutes!
Kick the can down the road - standard operating procedure. Make it into an election issue - bonus round. The last thing to expect is for them to do their jobs!
If and when the Fed raises interest rates it will make all existing dollar denominated debt more expensive to hold, thus causing even more sell pressure in the UST markets (of which China has already begun their exodus), and making the already untenable national debt even more untenable. I don't see them raising rates until and unless the powers that be decide that they are ready to reset the global financial system. I don't know the inside agenda so I have no expectation of when that may occur, but it is telling that the Comex odds makers are now predicting less than a 50% chance that a rate hike will occur in 2015, and even more telling that one of the FOMC members is pushing for negative interest rates. Without ZIRP and now the prospect of NIRP, the risk of another liquidity crunch looms.
FWIW--Our National debt is approx 19 Trillion $$$ with our GDP growing at 2% in a very weak 6 year recovery. With Global demand and global growth feeble, and China absent from the bid (buying commodities), there is declining international trade and demand for commodities. So, with a stalemate in our Congress, and a hostile government stance towards both big and small Biz, nothing significant will happen until there is a change in the Oval Office. Therefore another 12 to 15 months of feeble GDP growth, with prices at the supermarket going up for the average guy and no popular optimism for high paying manufacturing or service sector jobs. IMHO this infers zero rate increases at the Fed.; unrest in our cities due to weak employment; and a stock market pull back until change is "sensed" by the markets and biz owners. So borrowers are rewarded; savers penalized; by a Gov which could not pay the interest on our UST in a lifeless economy. We will have to "grow" ourselves out of this weak economy, or languish with declining living standards.
Forgive me if I don't tie this entire thought together. But what if interest rates went up and people opted to save by buying government bonds if they actually paid something beyond perceived inflation? Why don't our citizens own our debt? What happened to the days of everyone buying bonds? It's worthless. That's why. Maybe taking the foot off the monetary snow maker (and a rate rise) might cause a shift back to equity and cash in purchases vs chasing maximum borrowing power to get into the home ownership, auto, or education race. I've been saving and avoiding debt for my whole working life and got to say I feel lot poorer than those who haven't saved squat and have everything. I sit idly by and watch home prices go higher, new trucks $13,000 higher than the last time I bought one in '07, cost of an MBA a laughable investment etc.
I may have set you guys up for a real treat in the next few months. I sold 3 December call options with a $17 strike price today on GDX. With my septic touch, GDX is either going to go to zero or $30 between now and the third friday in December.
