Today the Federal Reserve may have not said much, but for the first time in over ten years we cannot complain about the Federal Reserve. We still think QE3 is coming, and besides near zero interest rates is a form of QE to begin with. However, finally the Fed stepped up and got to the issue. That this is no problem resolved with only monetary policies, but rather has to be major changes from the governments around the world and congress here at home. We still think and have been predicting the presence of the Fed is still in jeopardy long term as is the US Dollar. CNBC poll today showed that over 75% of Americans do not think the Fed can help them. Basically, they've given up on the Fed finally when we have been saying for decades, the Federal reserve system has plummeted your US Dollar by 96% since its creation! YES 96%! But, kudos to the Fed for throwing all politicians under the bus who for their selfish reasons are creating pain at the expense of their OWN innocent Americans. The Federal Reserve told all world politicians to grow up and understand there is a world outside your own lives. Hopefully, this can be a start to something. Maybe at least a launch pad. Never in American history has politicians have total disregard for the people at these levels. Of course, there are many good in the bag of apples. But, the Federal Reserve joined the American people today that he to is disgusted and actually in 'awe' how politicians have osterized a government of the people, for the people, by the people. The longer this recession continues (and don't kid yourself or insult innocent Americans, we are STILL in a recession!)the more educated people become of the economy and investments. They are quickly learning that getting out of debt by creating more debt has never worked in the history of economics. Japan still suffers from creating zombie banks almost 25 years ago and they STILL never recovered even before the unfortunate tragic earthquake.
Make no mistake, banks are well capitalized, but they have no catalysts to loan the money out. This is actually one of the biggest issues. Meaning there is no velocity of money. There's a TON of money out there, but the money is NOT exchanging hands. Instead it's being hoarded. We are literally in the 7th inning stretch and this velocity must happen sooner than later.
Unfortunately, we still have doubts. We think the Fed will get cornered and print more money with QE3 and then QE 4, and on and on we go. Washington is putting all the heat on monetary policy (Federal Reserve) without taking responsibility. And with inflation becoming hyper, treasuries will be a disaster. Our biggest concern then will be lets hope we do not enter another war some where!
So, yes we continue to buy commodities on major dips and TBT, and Canadian currency. Let's hope the tide in Washington turns and they put country first not party. Eventually, roses will grow again in America. Not short term, but this country has endured countless recessions, wars, Great Depressions, and has always managed through its thinking tanks and most importantly through its heart for its own people. When compassion returns, so does the economy!