seeldoger47
Senior Member
- Joined
- Mar 10, 2012
- Messages
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Quote:
The Fed has nothing to do with the deficit, that is fiscal policy, the Fed focuses on monetary policy. Don't conflate the two so liberally.
The Ten Year has increased 1% from the lows of May. That is it. The One Year has actually decreased. If the Fed wanted to bring the long end down, they would simply announce that they were targeting a specific yield on the 10, 20, and 30 year bond, crush a few foolish bond traders, and let the market do the rest.
You say stick with gold, but why? What happened to gold in '08? It lost value when investors needed it most. Do you think this time is different? Precious metals are small and relatively illiquid markets relative to the kinds of positions the biggest 5 minute macro tourists have. And when they decide to leave the door is going to look surpisingly small. Does that not concern you?
Ok, help me out here because I'm a bit confused.
Lets consider it money supply, I use printed generically, its not in circulation per se unless it is lent. So isn't that money sitting there in reserve? You call it swapping, but in reality isn't the Fed buying bank assets and its own bonds? This money exists on balance sheets. You can't just snap a finger and it disappear. I think what you are saying is that unless that money is released into the money supply it won't trigger inflation.
Of course Bernanke wants inflation, he is a student of the great depression. He recognizes that in an economy with a large private sector debt, there is a relationship where a fall in asset prices causes a shortage of dollars, thus producing deflationary pressures that can spiral out of control, a la the great depression, if the central bank does not intervene.I have the feeling that they want inflation, though. I believe they want to use it to water down the deficit. Interest rates jumped very recently, how did the Fed want that? It seemed like a market force to me.
The Fed has nothing to do with the deficit, that is fiscal policy, the Fed focuses on monetary policy. Don't conflate the two so liberally.
The Ten Year has increased 1% from the lows of May. That is it. The One Year has actually decreased. If the Fed wanted to bring the long end down, they would simply announce that they were targeting a specific yield on the 10, 20, and 30 year bond, crush a few foolish bond traders, and let the market do the rest.
That is exactly the point. What makes you so sure you will be able to put on that position in time? You and everyone else is looking for that trade. Can you identify a major market break before everyone else? What happens if you get your timing wrong? What if there is lots of volatility? It seems like an exorbitant amount of risk relative to the reward.If the market tanked, you'd be rolling in a short ETF. I wouldn't put much in it and it would be a short term trade of a matter of days, I want to stay in cash and GLD.
You say stick with gold, but why? What happened to gold in '08? It lost value when investors needed it most. Do you think this time is different? Precious metals are small and relatively illiquid markets relative to the kinds of positions the biggest 5 minute macro tourists have. And when they decide to leave the door is going to look surpisingly small. Does that not concern you?