Call me Evil because I am. There is no QE3 on Jackson Hole, and market rumored about a new FED activity on 9/21 FED meeting. Where we are? Do we need a new QE? Will there be a new dose? I will provide a detailed report later. Let me quickly jump to conclusions for now.
1. The US economy is in terrible shape.
2. We need some kind of cure but a QE limited in capital market (as we had, twice) will not help.
3. Will we get anything good tomorrow? NO. You think the Euro zone crisis started last night? You think Greece started to struggle recently? You think Italy is recently added to PIIGS? If your answers to all above are Yes, then I have to say you are screwed. Why existing issues got amplified recently? Because our friends from DC and NYC need us, general public, to switch gear. A resolution is due but they don’t have anything yet. What to do now? Somebody just find some more creative ways, such as pressing the Euro crisis button. By burning euro down will not do anything good to our economy, except to increase the value of US dollar on comparative basis. Are we in bad shape? Yes we are. But the rest of the world is even worse. On comparison we are still OK. We are forcing those surplus nations (actually I mean China) to keep on buying Treasury products. Gold and precise metal market is not big enough for them, and oil will tank on the rise of $$$. Where can they go?
I don’t think we will get any easing tomorrow simply because we are already in one. They will keep those wording to maintain the imagination / expectation as topping/dressing. Nothing more. If you ask me, it is all preset deals, it is all conspiracy.
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