There is no possible way that the Fed is going to taper, and I find it to be completely irresponsible that the current “media blitz” in the U.S media is speaking of it – as if it’s practically a given!
This is absolutely outrageous!
A bunch of floating heads reading a teleprompter, speaking as if they’ve some “authority” on the subject, rambling on and on and on,as to how the Fed’s “taper” is not “tightening”.
And you’re buying this bullshit?! Do you even understand the difference? Is there a difference?
It’s like this…..I can find a million different angles to illustrate the point, but in sticking with the “Japan is doomed theme” lets simply consider this.If the U.S Federal Reserve was to actually “taper” we all know the inverse / correlating effect it will have on interest rates. THERE IS NO WAY THE FED TAPERS WITHOUT INTEREST RATES RISING. PERIOD.
Interest rates rising in the U.S will put immediate ( and I mean “immmmmmediate” ) pressure on interest rates around the globe.
Boom!….Japan’s interest rate on outstanding debt rises to only 2% and BAM!
Full scale economic collapse / disaster / as the interest owed would exceed 80% of the government revenue, setting of a string of “economic events” tumbling domino after domino in this now “very global economy” we live in.
There is not a single chance in hell! The Fed is going to risk “global economic meltdown” by way of tapering, and “forcing rates higher” at a time when the entire planet is hanging by a thread.
This thing is so interconnected now that as we’ve discussed in the past – The U.S Fed has painted itself so far into the corner, that the only way to keep the dream alive will be to “increase QE”.
I honestly don’t know how the entire staff of CNBC as well CNN go home every night to their families etc – and are able to look themselves in the mirror with any shred of dignity, moral code or sense of decency.
Looking at the daily charts of the yen crosses and yen futures and its looking like the case for a near term bottom is certainly building if not here.
I’m sticking with my signals and just moving forward as always.
24 – 48 hours of volatility these days means nothin…..
I’m sure we’ll get the move.
Well you know my views on this my friend, and imho I suggest things will actually be worse if they don’t taper. I also think that the potential spike in rates is now partially priced into the ten and 30 year bond prices as the markets have a great ability to get ahead of themselves, so when (not if) the announcement comes there will be an impact but it will be less than many people expect.
As for Japan, as a vast majority of Japanese bonds are still held domestically the impact again will be quite limited. Their rates can’t go to 2% as they manipulate their rates to zero anyway and will announce their own additional QE.
On the talking heads, I agree 100%. We need to see and hear a lot less of them and turn over a bunch. Do real people listen anyway?
He he……I love it – “real people” he he he……a chuckle here..he.he.he….”real people”.
We think very much alike ol Deano!
Taper Shmaper, Japan Japon, on n on we go!
At least between the two of us – it will be very interesting as we see how things unfold.
You in the taper camp I’ve got to ask……certainly not Dec – but you expecting / considering March?
Talk about a double wammy in usd/jpy – lets get this JPY correction on / over with so we can buy all we can.
If you accept that the BOJ will eventually have to hit the bid on every bond issued by the Japanese government (every scenario leads to that point) why would the Fed care if they are forced to do it sooner rather than later? Since every one knows that’s the end game for Japan, I don’t think it would even enter the Fed’s equation.
The “end game for Japan” is the end game to a whole lot of things…
I can’t see the Fed looking to upset the apple cart.
Has anyone here ever considered that ” the massive QE out of Japan ” was “suggested” by the Fed?
In that light…..perhaps you’ll consider where I’m going with this……
It’s “global QE”….and its Central Bank “coordination” to a certain extent.
If everyone just keeps printing together….no problem right!? We all “slowly drift / increase the money suppply” and the sheeple won’t really notice.
It’s a “global currency reset” and it’s ugly / complicated / painful.
I suppose you believe it’s “only 85 billion” the Fed’s throwing at the bond market per month too.
I’m thinkin it’s waaay more than that.
Pick a city in the U.S on the verge of bankruptzzzy…..there are many.
There is “no recovery”, as the numbers reported are meaningless. Add up the debt, the joblessness blah blah blah…..
If you’re a believer then ya…….we’ll see you out on the field – on the opposite side of the trade.
Conspiracy theories are easy to spruik. I could just as easily argue that the US WANTS to raise global rates to screw China, Japan, Russia and every emerging country, ensuring even more that the US is geopolitically and economically dominant in the decades ahead. But where is the evidence? I trade what I see, and I see a Fed that has already damaged its reputation by failing to taper a couple of months ago – something that will be on their minds as they formulate their next statements, especially with a new Chair. I expect that the next message they send (whichever way it goes), they will stick to. And there will be some great trading opportunities there.
Trading what we see is essentially all we’ve got! You bet.
……this “speculation” doesn’t pay those bills right?
It’s my feelings that the Fed will continue to act with it’s best interest in mind.
With the biggest client on the planet ( the U.S Gov ) stepping up to borrow all day long – I find it very hard to imagine anything “less” than more QE – in the not so distant future.
I’ve been saying for 3 months that the FED cannot taper, or reverse what they have started… there is ONLY one alternative now, “ramp it up baby” until hyper-inflation kicks in, resulting in the ulimate end game… the collapse of the reserve money system as we know it.
Next year, in 2 or 3 years? I don’t know, and the FED cetainly doesn’t know, but they must realize by now what’s coming.
I’m preparing by buying gold on a weekly basis, as little as 1 gram a week… it’s affordable and within reach of anyone. When the crash comes, I should be protected to a large extent.
That’s where I’m at too EZYFX – the house of cards is just a “littttle to flimsy” in my view.
Deano’s got conviction which I admire, not to mention all kinds of numbers n knowledge.
Me…..I”ve got a spaceship and a glovebox full of Yuan.
Now that there is a budget deal, the odds of a taper seems to be higher?
“The dollar is our currency, but your problem.”
The only way I can see an exit working is if two things happen…..over quite a long period of time….and I personally see this as really unlikely. Yes Deano is probably right that a small taper has probably been priced in. But to taper and not freak out the bond market, job growth would have to happen steadily and only minor tapering could take place at the same time. So, let’s say you taper 10Bil a year. Its going to take 8.5 years to taper. Do you really think you can extend the good part of the business cycle for another 8.5 years? Not to mention a slip into the downside with unemployment numbers this high means even higher QE to ramp and stabilize prices……We might see a one round of tapering of a miniscule amount and then back on the program in my opinion…and it will be jacked up!
The average expansion period from what I have read is 3.7 to 5 years from what I have read. So,……..
Yes – the only circumstances I see a taper is to “set up” the addition of larger QE.
Taper a nominal amount – watch the planet have a cow, then “double up” as if you’re saving the day.
I agree with this. Some kind of ridiculous 10 – 20 billion dollar taper or something early next year, and then in Q2 dump another QE in the works much larger, as Japan will most likely be doing the same.
As for the media, I haven’t pulled up CNN or any other American media website/channel in a long time, and where I am I can’t even get American Channels on TV, but I know very well exactly what they would be saying lol, and I would neither pay heed nor one ounce of time to these clowns.
I actually don’t even believe that the issue is solely economic anyway. I believe it has political roots at heart, and that this is the deeper problem. This is much bigger than the old Bernanke helicopter spins and the ECB rate cuts, blah blah. I see an end to the system as we know it on the horizon. The entire system of capitalism, free markets, free trade, free anything for crying out loud is in peril.
I don’t want to be dour, but I see severe change in many countries on the horizon in the years to come….One way or another.
The economics, markets, etc, simply being the result of political restructuring, turmoil, collapse, and of course further war.
Some nominal number to appease the retail clowns, who actually buy this crap – then an “immediate doubling/tripling” coming out looking like hero’s for once again “saving the day”.
No matter how it manifests……The Fed / U.S Gov is gonna need “shwacks more cash” to even keep this thing afloat moving forward – much less “improve it”.
I got CNN “on purpose” down here as an experiment, and it’s been well worth it as……the looking glass into what “Americans are told” vs “What is” has been a hoot.
Now this budget thing…ya I see the market really likes that too! He he he….
There “hasn’t been” and “never will be” any such thing as a “debt ceiling”…. as “it” will be raised, then raised again ,and again and again….it doesn’t exist, it’s never existed.
Change abound everywhere – yes indeed…as Japan is sure to increase QE come April…..and the U.S to taper.
There is no longer any chance of a taper. Benny hinted at it a few months ago and the markets nosedived, and he had to retract his hint, then the markets recovered.
QE is now the “drug of choice” for not only the US, but for emerging countries, because much of the QE money thats going to the banks ends up in bonds and developing countries… its not going into helping kick start the US economy, which can ONLY happen at grassroots level… small business. BIG business DOES NOT kick start economies, Mom and Pop operations do that, and the banks are not willing to lend to small business when they can invest in government guanteed bonds etc.
These banks are getting this freakin money for free basically, and so they are happy to loan it to the government when they see no risk.
Joe Average misses out, and it’s his freakin money!
Its also Joe Average’s children and grand childrens inheritance.
Habanero anyone? ?
Please elaborate Andy – you looking to borrow a couple of my recipes?
Just felt the moment was right to throw in a reminder of the Habanero challenge. Dollar down to 72 to 75 – gold up within a couple of months if I re-read it correctly. The taper issue is gonna decide if your head gets blown off or not from what I can see. Don’t get me wrong, what you’re saying is perfectly feasible but ya never know. Game on.
You kill me Andrew.
7 straight days of “red candles” in the dollar index and a 35 dollar rise in Gold since the post – and you’ve got this to suggest / say?
Unreal man – like we’ve not already been over it 1000 times. Long term speculation is “supposed to be fun”, and if the short term “amazing calls” aren’t enough for ya – wow………
Sounds to me like you’re likely just a little choked as to the trade decisions you continue to make, or perhaps are “again” sitting underwater on a couple more.
But as the post suggested – and I quote:
“I think it’s about time – we’ve had enough of this “mucking around” at these levels, having more or less “danced around” the past few months. It’s time for the next leg down.
I don’t have time here this morning but if you want to pull up a general chart of the $dxy or in some platform (like stockcharts) $USD, I’d get your sights set on a serious of long red candles taking us down into that area around 75 – 72 in coming months.
If this “doesn’t” correspond to an “inverse move” in the price of gold and silver ( looking at is as such a dramatic decrease in USD value ) I will be forced to take on “the Habanero challenge” as I have offered several times in the past.
Man…..pretty bang on if you ask me.
The taper issue is “gonna decide if my head gets blown off”? – You’re just figuring this out today?
Andrew, Andrew , Andrew! – Do you think?
The largest and most impactful influence on global markets as we know it ( The Fed ) deciding if they are gonna turn the juice off or not, and you think it might blow a couple heads off?
You are catching on Andrew – you are surely one to watch here, with such timely and insightful views.
Usd/jpy dropped quite abit today. I closed it most of the positions. Now waiting for aud/jpy. Yeah!!!
Yes Careydina – “I told you not to worry so much”!
AUD is making the turn across the board as I see it so…….let’s see how it continues to move.
The long term 100 pip range in AUD/JPY has to break “sometime” and odds would be ( after the Kongdicator alert etc …) it will break lower.
I just closed all my aud/usd positions. Made 300 bucks! Buy ya a dinner, cheers!
Have a look at those trades I entered this morning… over 240 pips in the last hour and a half!
Still on the move as EUR moving fast vs Commods.
AUD and NZD taking the hit!
Did i closed my trades too early? Well just wish not to stress up. Haha… Anyway, eur is really rock lately. I closed and profits all related eur positions last 2 weeks. Perhaps i should have wait a bit longer. Ha…
Wow Careydina…..perhaps you’re not checking in often enough as….I’ve been long GBP as well many EUR trades right up until this morning!
The consistant downward action in USD has resulted in some great EUR moves yes.
I’m going to book profits here, and watch closely to reload vs AUD and NZD.
3% on the morning! And I’m out the door!
Yes. I closed my gbp/usd too. And now i long gbp again. Technically gbp looks will hit 1.65 or more to me. How do you think kong?
I’ve re entered long , but as I see the move looking a little “weaker than before” – I’m just letting a small position either hit it…or I’ll dump immed.
Ya pounds please…
That will happened when you open your eyes on tomorrow morning ;))
Now i going to bed. It’s about 1am here. Good night kong!
New trades entered this morning all moving into profit, as well EUR/USD re entry looking good.
On a broader note ……..the JPY pairs and the “potenical upward move in Yen” is really coming along….
Patience certainly the key as….these things often take weeks to make a move – large enough to bank.
New trades as per the tweet this morning are really on the move (130 pips combined since the tweet )as USD continues lower ( 8th day now ) and EUR bangs higher vs commods.
AUD and NZD had their lil “pop” but have now turned.
Hmm.. quite confidence tho. Haha as if no tapering-pounds will get much more stronger. Wait n see it. :))
Generally speaking yes….a continued “toilet paper USD” will bode well for GBP.
Just that the move has been quite strong, now stubling a bit so……..
Short term …go easy….longer term – GBP or USD?
Taper in January
So Yellen jumps into the chair..and at the first meeting of the year – she tapers?
Wow……I’ve really got to get a front row seat for that mess.
I would have said December but even the Fed won’t think it’s a good idea to risk disrupting the markets right before the holidays.
Yes of course…..that’s the reason “Uncle Ben” decides not to taper.
Here’s a little tid bit for some of you….something for you to consider.
There was just a little over $800 billion of base money in existence before the crisis in 2008… that’s 200 years worth of currency creation… So that’s 0.8 trillion… now the Fed creates one trillion every year… that means they are creating more than 200 years of currency every single year.
And we’ll just “hold off” tapering that amount for the holidays…..
He he he……sure.
No taper….never, if only to “prove to the planet” what will happen if they “do”.
Taper = more QE.
With an understanding of the true scale of it – WTF would 10 billion no 20 billion taper even matter?
Answer = zip.
Don’t believe it if you don’t want to but $5-10B Taper coming in January.
Oh, and tapering and tightening are two very different things…
Yes the taper vs tightening element.
Please…as everyone here would really appreciate it:
Steve – the floor is yours buddy!
Explain the difference please, as well how you expect to trade / play it.
You play it anyway you want but a taper is coming.
A trillion a year and u have some notion that 5 billion is of any consequence.
Right on Steve. You’ve got this nailed.
Why so angry? You said no taper and I disagreed and say taper.
$5 billion is of no consequence to the Feds balance sheet but it will move the dollar and bonds so certainly of consequence for trading.
We usually throw around facts / figures / views with a little more “meat on the bone” than just …..
“fed will taper in January”.
He he he…..just a little “thin” for readers here I imagine.
Relax guys~~~ we’re all trading in forex as for $$$. All opinions are good in consideration on our trades. Listen and combined it on your trading strategic.
Same question from me Kong. Why so angry? My habanero joke was meant as a that – a joke. No need for sarcasm. My apologies for my newbie views, u won’t get any more of them.
Anyone who thinks that the FED will taper, is living in “LA LA land” in my opinion.
But the market (ooops “media”…..er Fed / whatever) has to get these people on the low end of the totem pole to move “with them” as – that’s who’s paying their salaries!
It all works as one beautiful machine…wash, rinse repeat – wash, rinse repeat.
Retail fodder = Banks / Wall St profits.
Kong I don’t think most people even realize that Japan pretty much invented quantitative easing and has been in this process for YEARS!!!!
Yet the US has pretty much JUST BEGUN QE.
The U.S Fed’s balance sheet ( primarily a large number of fabricated zero’s n ones ) hasn’t even started ballooning!
So Jim Rickards even acknowledged that tapper is possible but ….
Jim Rickards @JamesGRickards 10 Dec
I’ve said no taper in Dec. @steveliesman #Greenspan @EconomicsOne out tonight saying taper. Fine. If so, then #QE4 begins with reverse repos
The point is if they do tapper there are other ” tools” they may want to use. I think the market is just wanting to get stroked like a kitten a little and Ben may give it to them.
The market get’s what it’s given… and so far it’s been eating up QE like a pig in a slops trough.
Pigs don’t change their habits… EVER.
And Ben has no cards left up his sleeve, and Yellen almost certainly ain’t got Jack up her dress!