December 2, 2013, 6:11 AM
Tapering is not the same as tightening even though everyone seems to view these terms as synonyms. We had previously described tapering as highly unlikely, but the truth is that it was an oversimplification that we used to make a point about the possibility of monetary policy tightening without getting into details - which we do in the December Market Overview.
Some form of “tapering” may actually happen even though the Fed stays “easy like Sunday morning” in its approach to money printing, and… One form of tapering has already been seen in 2010!
The truth is that there's much more to the tapering issue than just the Quantitative Easing program simply because there are more tools that the Fed uses than the QE itself:
- Interest rates are kept very low for a significant amount of time
- Quantitative easing, which means money production for support of various assets, especially government bonds
- Easing in terms of qualitative aspects, that is the expansion of the Fed's balance sheet which has benefited not only government bonds, but also mortgage backed securities
One of the most important questions for gold investors regarding Fed's policy is what could be tapered and what's highly unlikely to be tapered. The even more important question is how it will impact gold market and your portfolio. You'll find details in today's essay.
November 4, 2013, 9:29 AM
It turns out that Bernanke had told investors what he would do years before it happened... That is, if investors had known what they should've focused on. In the November Market Overview report we'll discuss these very early indications and examine what an analogous technique can tell us about Yellen and the upcoming years.
In this month's report we'll also discuss Yellen's efficiency in predicting the inflation rate, labor markets outcomes and GDP growth. She has been widely praised as the best predictor from the group of the Federal Reserve Policy makers. However, it is not her efficiency that is the most important thing that investors should be considering. It is the justification behind these predictions. When one digs deeper and gets to the core of Yellen's approach, one will be well-prepared for her actions despite the usual smoke-and-mirrors talks preceding the meetings.
We have, and we put our findings in this month's report. As you may recall, we wrote that there would most likely be no tapering weeks before the official statement and despite the popular opinion. The November Market Overview gives you the very first heads-up on what's to come based on techniques that have already worked.
October 1, 2013, 7:55 AM
In September we observed a highly overrated meeting of the Federal Open Market Committee. It attracted lots of media and investor attention because many were expecting the Fed to announce the beginning of “tapering.” All the hoopla surrounding the meeting turned to naught when tapering tapered out, but the question remains: how will the tapering look like and when will it take place?
September 20, 2013, 1:16 PM
Although follow-ups are not a regular part of the Market Overview service, we wrote one to keep you 100% updated on the most important economic piece of information - the Fed decision to keep the QE program intact. As we explained in the previous report, this was in fact the likely outcome - Fed minutes indicated it. What's next? Will we see tapering this year? What's the outlook for gold given the recent comments? What's the link between Fed's decision and the fact that Fed's new Chairman will be chosen shortly? These are the key issues that we focus on in today's quick follow-up.
September 3, 2013, 1:46 PM
In the September Market Overview report we will focus on what is probably the most important factor that will to a great extent determine what will happen in the coming months, not just in the precious metals market, but also in bonds, stocks and real estate markets.
Yes, you guessed correctly – we are going to discuss the Fed’s possible actions and the probable effects on the markets. Will we actually see any form of tapering or will we just hear about it? If so how will remarks made by the Fed impact actual events? As you know, very often what Bernanke or someone other Fed official says can ignite large price moves. So, for the analysis to be complete, we should focus not only on what happens but also on how it is announced.
Based on the possible combinations we created eight scenarios and we discuss how each of the markets (gold, stocks, bonds, real estate) could perform in each of them. We also explain which are the most and least likely. If they play out in the future you will already know what to expect in the following weeks/months. Be prepared.
August 9, 2013, 6:56 PM
The wait is over! Starting today, we accept subscriptions to our monthly Market Overview report. It’s an add-on to Premium Updates that enables you to see great things from the distance. The price tag is liberal. $14.95 per month.
Inside this issue:
- The place of gold in the current state of affairs
- Gold as an anti-inflation hedge?
- Anti-inflationary investing vs. anti-system investing
- Physical gold market and the financial market