Well folks, this is definitely worth waiting up for! Will it mean being patient for a little bit longer before gold gets its next leg up? i.e., QE3 not occurring in late Aug but before the end of the year around about Nov as per 2 years ago? But bear in mind, Nov 7 is the date of the US Presidential elections so perhaps Oct? Any takers?? For the full article, use the link below http://www.bloomberg.com/news/2012-...disappoint-investors-primed-for-stimulus.html By Joshua Zumbrun
A massive dose of Hopium to get the markets through till November but no actual QE until a major crash pushes their hand
Thu Aug 30, 2012 7:46am EDT * Euro edges up vs dollar ahead of Bernanke speech, ECB * Market waits to see if Fed hints at more easing * China concerns push Australian dollar to 1-month low * Little impact on yen from Japanese political standoff By Jessica Mortimer LONDON, Aug 30 (Reuters) - The euro edged higher against the dollar on Thursday as investors waited to see if U.S. Federal Reserve Chairman Ben Bernanke delivers firmer hints on more monetary easing at a meeting of central bankers on Friday. Any signal from Bernanke when he speaks at Jackson Hole, Wyoming, that the U.S. central bank will embark on another asset buying programme would weigh broadly on the dollar. This would give an additional boost to the euro, which has been buoyed recently by expectations the European Central Bank will unveil concrete plans next week to help bring down crippling borrowing costs in Spain and Italy. The euro was up 0.1 percent at $1.2547, within sight of last week's high of $1.2590, which roughly coincides with its 100-day moving average. A rise above $1.2590 would mark the euro's strongest level in eight weeks. However, its rise was limited due to uncertainties about Fed policy, with recent improvements in U.S. economic data marginally reducing the chances of more quantitative easing (QE). "The risk with Jackson Hole is that unless there is further strong signals of more easing, the market will take it as a disappointment," said Christian Lawrence, currency strategist at Rabobank, adding that this would be positive for the dollar. "The bar is quite high and if there is any paring back of talk of QE the market is likely to react more because it is more or less expecting it." The euro was also lifted after Chinese Premier Wen Jiabao was quoted by state news agency Xinhua as saying China is to continue to buy EU government bonds after fully assessing risks. The single currency showed little reaction to Italy selling 7 billion euros of government debt with ease. CHINA CONCERNS Growing concerns about growth limited investors' appetite for taking on risk as a flagging Chinese economy looked to be curbing demand for commodities such as steel, iron ore and copper. This weighed in particular on higher-yielding and commodity-linked currencies like the Australian dollar, which fell to a one-month low of $1.0318. It traded very close to its 200-day moving average at $1.0311 and technical analysts said a break below there could deepen its losses. The Australian dollar was last down 0.2 percent at $1.0329. "The currency is holding up well compared with where commodity prices are going. The carry you could achieve being long Aussie is still good and there are not many other AAA-rated assets left," said Geoff Kendrick, FX strategist at Nomura. "I am telling people to be bearish Aussie on the crosses, but to be outright short Aussie you need to wait for Bernanke tomorrow and also get more clarification on China." The yen stayed within its recent range against the dollar, showing little reaction after Japan's opposition-controlled upper house passed a censure motion against Prime Minister Yoshihiko Noda the previous day. The dollar dipped 0.1 percent to 78.61 yen while the euro was steady at 98.65 yen. The censure is non-binding but effectively means that Japan's opposition will stop cooperating with the government on most bills. Analysts said the political wrangling is unlikely to have too much impact on the yen, as ruling and opposition parties are likely to eventually hash out a compromise. http://www.reuters.com/article/2012/08/30/markets-forex-idUSL6E8JU9ID20120830
O.k Bernanke has admitted things ar'nt so good and has 'left the door open' for more QE....It's just a matter of when? "The basic problem for investors at this point in time is that everyone knows the Fed considers the current economic performance to be unacceptable, but is it unacceptable enough for them to act today or tomorrow before the election?" http://in.reuters.com/article/2012/08/31/us-markets-global-idINBRE86F00620120831
I believe at some point that the market reaction and Bernanke's actual announcement of QE will decouple. This means we'll see a move by the market before any official announcement purely because of the expectation and build up of anticipation. If this occurs, it may even further delay an official announcement. But we are unlikely to see a move by The Fed before the election. Any announcements by Bernanke prior to that are just intended to be soothing word of love and affection (albeit it as genuine as a 21 year old male's on an end of season footy trip) designed to spur the market into moving on its own accord, without the necessity to move to QE.
This whole thing of the markets hanging on every word Bernanke says I find laughable. He only has to hint at QE3 and he sends the markets into a frenzy. mmm...shiney - I agree with you, he may never have to do any QE3, just keep beating about the bush with speeches which no-one can really interpret one way or the other. Really he hasn't committed himself to doing anything and nothing has changed and probably wont change till after the election.
Draghi and the rest of the bozos in Euroland have been doing the exact same thing for the last 2 years. Bond prices start rising to "unsustainable" levels then one of these leaders - Monti, Draghi, Sarkozy or whoever is in charge for the day comes out and says - "whatever it takes" and voila - everyone is happy, the stock market rises, bonds fall and the can is kicked down the road for another week/month/whatever. How many meetings have the eurozone leaders had to fix the problem? - so many its beyond count. Nothing gets fixed, but nothing crashes either. they can keep this going a while yet I reckon.
Gold doubled, then doubled again and then doubled again between 2000 and 2008, before any overt QE. The global economic conditions have not improved one iota since then, but have deteriorated significantly and Gold has yet to double from its 2008 highs. Why? MOPE, Manipulation Of Perception Economics. By projecting themselves into the centre stage of global economics with their money printing antics, these central bankers have hijacked everyone's perception of the fundamentals that are ailing and attacking our prosperity and turned everyone into gamblers. This greed sentiment that motivates the big money has been stimulated with free money via ZIRP and central bank asset purchases so they move money hither-and-yon chasing returns in low risk, non-productive, financialised investments. Just like a good magician, they draw your attention away from what's important and sucker the public into focusing on something else lest the trick be revealed. This business of sweating on what the Bernank may or may not say is a complete side show, IMO.
This is why I think Technical Analysis in these times is next to useless. All the TA in the world won't help when the Bernank opens his mouth.
What I can't understand is why the market takes so much notice of what Bernanke says - his words should not have such a dramatic effect on world markets, who cares whether the US starts printing again, they've probably been doing it all along anyway in one form or another. I don't see him as a very clever person, remember him saying 'gold is tradition' His speeches are like something out of Nostradamus, full of all sorts of interpretations and saying really nothing.
