Danger: The QE 3 “Hope” Rally is Going to End TERRIBLY

I’ve warned many times that QE 3 will not be coming any time soon and that stocks are on very VERY thin ice.

With that in mind, I wanted to alert you to the following news story:

Those looking for a clear and unambiguous green light for QE3 from Fed Chairman Ben Bernake’s much anticipated speech in Jackson Hole on Friday could be disappointed.

There are three reasons that add up to Bernanke likely falling short of market expectations for an all-out endorsement of additional Fed [cnbc explains] action at the annual meeting of central bankers in Wyoming the way he telegraphed QE2 [cnbc explains] last year.

It’s also rare for a Fed chairman, especially one this consensus-oriented, to get too far out front of his committee. The August policy statement clearly showed a willingness of the committee to conduct additional asset purchases.

This article was written by Steve Liesman of CNBC. Liesman is known to have extremely close ties to the Fed. So for him to write this sort of story before the Fed’s Jackson Hole meeting (Friday) is EXTREMELY significant.

Consider that the only reason the market is holding up is due to the bulls desperately hoping the Fed will unleash QE 3 this Friday. Now consider that Bank of America is close to collapsing at the very same time that the European debt contagion is threatening to take down the entire European banking system (Germany is increasingly unlikely to give the “greenlight” to more bailouts).

In this environment, for the Fed to NOT unleash QE3 on Friday could cause a full-scale market collapse. So it would make plenty of sense for the Fed to try and do some damage control ahead of time with stories similar to Liesman’s.

Now, have a look at Gold’s action this morning: the precious metal is down over 3% in just a few hours. Do you think perhaps some “well-connected” investors might know that Bernanke isn’t going to unveil QE 3 tomorrow (the Fed has a precedent for leaking information to the “chosen” few).

If QE 3 were coming, Gold shouldn’t correct. The same is true if BAC were going to be bailed out suddenly: Gold should keep rallying. But instead Gold is falling sharply.

The same goes for Brazil: THE commodity player and one of the emerging market darlings for the Bulls. Does this chart look like we’re about to see QE 3 (which would send commodities through the roof)?

Again, this is a major signal that QE 3 is not coming. Those who are hoping it will need to look at what the markets are telling us. Ignore stocks and pay attention to the credit markets: they’re on DEFCON 1 RED ALERT.

I fully believe we’re about to see another catastrophic Crash similar to 2008. Many people are going to see their portfolios get completely destroyed.

You don’t have to be one of them.

I can show you how to turn this period into a time of profits, NOT pain. To whit, my clients actually made money in 2008, having been warned a full three weeks in advance of the Crash to get out the market and go short.

I believe we could see another 2008 situation unfold in the near future, which is why I just unveiled six specific trades to subscribers… all of which will pay off HUGE returns as the current stock market collapse accelerates.

We’ve also taken steps to prepare ourselves sand our loved ones for what’s coming to the US economy (bank holidays, food shortages, stock Crashes, debt defaults, civil unrest and more) with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports: 40+ pages of material devoted to showing individual investors how to prepare these areas of their lives in great detail.

So we’re ready for whatever may come. And the worse things get… the more profitable our strategy will be.

If you’ve yet to take these steps yourself, it’s not too late… in fact, you’ve still got time to get your financial “house” in order to not only survive what’s coming… but potentially even make serious money from it.

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Good Investing!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

 

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