Research for Online Investors
Something stinks in markets
world-wide. Price action indicates traders and investors are buying
stocks to capitalize on future monetary easing. Are we seeing the
results of the meetings and phone calls late last month between Obama, Bernanke & Geithner and their eurozone
The president doesn’t want markets
to fall apart before the November election. Bernanke wants to delay any
quantitative easing until after the election so he isn’t accused of political intentions. Geithner is just taking orders from the President.
What did they tell European leaders
and bureaucrats? We can imagine:
Shut up. Quit
talking so much. We don’t need
public discussions of all the preparations that have to be made to let Greece out of the
eurozone. It serves no purpose to
discuss how bad things are in Spain and Italy. Of course Germany, Finland and the Netherlands will require punishing conditions on any bailout
terms, but you don’t have to give press conferences!
Of course we were not on the phone
to hear the actual conversations, but doesn’t it make sense? Since the
first part of August, there has been a virtual news blackout on the back and forth headlines about the worsening
problems in Greece, Spain and Italy.
It helped that Europeans
traditionally take ‘holiday’ in August, so Angela Merkel went hiking and others headed off to private islands and
away from the press.
Last week they started coming back
from ‘holiday’ and the market picked up the ‘headline risk flu’ until Friday when Bernanke sent a letter to
congress. Isn’t it amazing how the letter was made public after the
market opened Friday morning? By a republican!
The fix is in. The Fed wants to counterfeit some more money. They want to do something. They are just
afraid it may not work, so they need help from the Europeans.
The U.S. Federal Reserve is
now the World's Central Bank
Bundesbank President Jens Weidmann
expressed concern about the European Central Bank’s plan to buy bonds from troubled countries to Der
Speigel. Weidman warned that monetary easing can “become addictive like
a drug.” The General Secretary of the Bavarian Christian Social Union
political party commented last week that Greece wouldn’t be part of the eurozone by 2013.
Angela Merkel was interviewed on
ARD Television yesterday. She wanted to tamp down
the ‘unhappy talk.’ Chancellor Merkel told ARD Television that such
comments were damaging as crisis fighting reaches a “decisive phase.” She praised the Greek government for
making “serious efforts” to reduce its debt and said “Everybody should weigh their words very
While she wants the members of
government to watch their words, she praised Weidmann for continuing “to make demands on policy
Interesting. Merkel assumes the Bernank will call Weidman and ask him to tone down the critical
Rick Santelli mentioned this morning
that Rick Rule equated Monetary Easing or QE (Quantitative Easing) with counterfeiting. Rick Rule is manager of the Sprott Global Resource Investment Fund ($1 Billion).
What is the difference between QE and counterfeiting?
Simply, who prints the
Paper money is only worth what
someone else will honor it for in goods or services. There is no
intrinsic value behind the dollar since the gold standard was dropped in 1971. What is it worth when no one wants them? Try to sell China some U.S. Treasury
We continue to be negative on the
market. The downside risk is much greater than any possible
gain. What is the market going to do if Bernanke doesn’t tip his hand to
more QE on Friday in Jackson Hole? What happens if the eurozone decides
the Greeks are not serious about cutting their deficit? What happens
will not be pretty.
Maybe the US needs join the eurozone! Perhaps then, someone would tell those
who supposedly represent us that they need to cut a trillion or more from our deficit.---Long-Term subscriber
That someone would be the Germans. Our day is
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