Hi guys The general concencus ,i think you would all agree is that when QE2 expires , the markets and precious metals will take a big hit as investers run for the treasurey bonds . We are all assuming that precious metals activity is anti inflationary , and perhaps it is , but has anyone thought about the possibility that when the fed stops propping up the Dow Jones with printing money , that investers might not have confidence in treasury bonds or currency and take positions in precious metals and reignite a bull run ??? What are your thoughts...???
Not sure about the life span of QE2, or its siblings, QE3/4/5/6....... All I REALLY know is that all those new Treasury Bonds MUST be sold as required by the out of control US Budget, and for redemption of the maturing Bonds. Nobody apart from the FED is interested in buying or re-investing the goodies, so the printing presses MUST continue. What they will announce or what they will call it I do not know, anything is possible. OC
oh, ok thanks, for some reason I thought it was June 16. I wonder if the end of QE2 will be interesting to watch
Ok I'm not part of the general concencus then I still don't see 'precious metals will take a big hit as investers run for the treasurey bonds'... Investors are taking hits now and becoming far more careful with there dollars - little effort from there part will see treasurey bonds are the worst move they could make...see little chance of 'the fed stops propping up the Dow Jones' as it would be an overnight colaspe... 'investers might not have confidence in treasury bonds or currency and take positions in precious metals and reignite a bull run ???' for sure... I get the same feeling many here are waiting for this 'big drop'...all I know is one of us will be wrong - I've loaded up pretty heavy in May/June but can't help feel I'll look back in a few months kicking myself for not buying more...
I think investors are running towards Treasury Bills, not bonds. Bonds expire in long long long time and a lot of SAAAAAAAAVY investors are running away from them and buying Treasury bills which expire within the year. Still rather hold Gold/Silver though
Yep bloody turkeys...I always fine it funny where 'Treasury bills which expire within the year' are deemed safe Just go one year back from this date and see what has developed...whats the spot increased?...how much money got printed?...how many business went belly up?...how much finacial unrest has developed? etc Buying Treasury bills is basically giving an loan to an unemployed person,who has no chance of getting a job and has no interest in paying you back the same worth some day into the future...
I will personally be getting out of my silver positions before the end of QE2, Gold i will be holding onto and seeing what happens as i expect the USDX to rally after QE2 sending the AUD down and thus Gold up. I believe we may see another spike in Gold priced in AUD similar to that at the end of QE1. As i believe Silvers market is around 38 billion approximately, and when you consider every month during QE2 around 95 billion is pumped into markets each month which needs to find a home and as it appears commodities have been that home. When you remove this floor i believe we could see a significant drop in the price silver even if its not founded speculation could push down all commodity prices. That said i see the end of QE2 as a buying opportunity for quite a few things.
Right after QE2, there might be an upward spike further fuelled by mass media news of "economic stability" and a sentiment that perhaps the Fed is showing dicipline, but it will be short lived when investors realise the jump start didn't really get the motor running again. Kinda how when the "We Killed Osama" party and media frenzy was over, the people realised they still massive debts to take care off. That's probably the only run-up we'll get before we hit GFC2, which by then will be 2 weeks away according to my tin foil hat. In any case, I'm holding all the way until GFC2 unless Bega Cheese opens offers sooner than expected. Something tells me they probably don't wanna right now lol
If QE2 ends i don't understand why PM's should go down (although i believe they will). They increased in price (inflation) due to the increase in amount of $US, just because they stop QE2 doesn't make all the excess printed dollars disappear.
I believe this as well, i can't see a reason fundamentally why Gold should drop(Silver i believe will) but i believe the drop will be accelerated due to panic and speculation. But i believe this will be a great buying opportunity especially if you believe QE3 is coming.
Oh yea, I did say I'd sell my trading portion of silver on the run-up to GFC2, so that's also imminent. If it ain't looking too good I'll just add it to the rest of my stack. Kinda feels better that way
Will the $US strengthen as a result of the 'flight to safety'? If so, will that cause the $AUD POS&G to go up? Or will POS&G tank like the DOW, despite this? I was under the impression G&S were (relative) safety havens?
I think QE3 will come... or some new bright idea , USA economy is not in good shape at all, we should analyze USA parameters before QE2 , BDP, unemployment, debt, inflation and if they show same pattern like before QE2 answer is clear. If they stop printing and USD go up ,export will fall, unemployment raise , debt will rise,inflation slow down-BB want opposite, commodity prices will go down in USD and then price will fall further bcoz less demand for USA industry, consumer fear will grow up which will push price of commodity more down .On other side inflation in China will slow down, China will get cheaper commodities including PM for same money they already have in pocket just like they get rewarded from fED bcoz was trustful in USD, there r opinion that Chinese export will fell down then but, as inflation slow down prices of Chinese products remain same and China is not making high quality products like Germany,Japan ...just simple cheap things for every day use so people will still buy cheap stuffs bcoz they dont have for others. Effect will be totally opposite and past 3 years will be wasted . Even this is possible we must see something else on scene to keep balance, like new war with Iran or North Korea...
In terms of Q2, the following will be short-lived: -USD will go up against the AUD, but I don't see AUD falling below parity, especially if the Russians are really looking to increase their AUD position as they say -POS, POG and stocks will move upwards The "flight to safety" angle might be played but only if the EUR outlook is popularly worse than the USD. With the eurozone "bailout-can" kicked down the road, it can go both ways depending on how the big boys want to butter everyone up. And they will. They will drive a market rally and the mass media will spit out good news like that there are "strong signs of a recovery in the US" etc... When the party's over and the lack of fundamentals are exposed, the drop will begin towards GFC2. And yes, it will all tank at that point. QE3 may be announced around that time to try and save the market, but it's effects will be minimal, like the government bail out package in 2008 which was like a pool cue trying to prop up a circus tent. It gave way in a couple of days to a week. It can't be helped that most of the POG and POS is based on leveraged paper metal, so when the traitors/traders exit to cash to pay off their debts, both will fall. The only paper safe haven for Q2 and GFC2 is cash, unfortunately. Physical, especially gold, is insurance against SHTF/economic depression which may occur post-GFC2 when all the problems start compounding. While the music plays, POG and POS will determine how we buy our metals, but after that it's based on it's instrinsic value.
I simply cannot understand anyone thinking that a US Dollar note or a US Treasury Bonds are 'safe'!!! Neither have a future that I can see, and no matter what I will be holding on to my silver all the way to the other side of the coming disaster. OC
There will be QE3, then QE4, and QE5. Gold and Silver will drop, and bounce around. At this low price, there will be a Gold and Silver Confiscation, particularly in the USA. There will not be a Mad Max type SHTF. It is all being manipulated to a fiat based, One World Currency.
lol - i love reading posts by the Einsteins who are going to get out of silver by the end of this month because of the end of QE2. highly amusing... It does not matter what hairbrained schemes the ruling elite come up with - both gold and silver will continue their ascent in value. AMEN
It appears that we both share a similar viewpoint. Whilst I do not know exactly how it will all play out, I believe that there may be significant fluctuations in the coming months. However, I have also been on the record previously stating that I would not be surprised if AG gets to A$60, and AU hitting A$1900 by years end, and I still believe that there is a real possibility of this occuring. Only circa 6 months to go to find out.
