Doubtful the Fed will Make a Move Next Week

Author Larry Berman

Posted: 30 July 2012 re-posted from etfcm

As speculation mounts over another few trillion of debt purchases globally, the gold seasonal trade may have its day in the sun. We doubt the Fed has any more information next week than they did last meeting or in Bernanke’s recent testimonies to suggest the Fed moves next week. To be sure, they “stand ready,” but we already know that. If the Fed rolls the dice now and it does not work (because is can’t), then next year when the US fiscal cliff presents itself and the Clowns in Washington cannot get their act together again, just a dab won’t do ya. So they need to save the bazooka for the cliff.

All the metrics that Bernanke has mentioned as a trigger, namely inflation expectations as measured by breakeven spreads between inflation indexed bonds and nominal bonds, is still North of 2% and not anywhere near previous trigger points—though heading in that direction. Anyone looking for it next week is likely to be disappointed. That rush of post announcement selling might be the next best buying opportunity for the TSX and gold stocks.


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