I’ve been pounding the table for months saying that QE 3 wasn’t coming. The reason was simple: the Fed is now politically toxic and cannot engage in aggressive monetary policy without experiencing severe political backlash (this is an election year).
Well, here’s yesterday’s FOMC announcement proving me right… again. Indeed, the Fed has disappointed the “QE is coming” crowd since July 2011. We’ve had Operation Twist 2 which is just the Fed re-arranging its Treasury portfolio, we’ve had promises of extended ZIRP, and we’ve had a multitude of verbal interventions from Fed stooges like Charles Evans…
BUT. NO. QE3.
This makes 8 Fed FOMC announcements/ releases and no QE 3.
Folks, QE 3 is not coming. Not without a Crisis first. End of story. The last time the Fed hit the QE “print” (QE 2) food prices shot to all time records and revolutions and riots exploded around the globe.
Today, gas is already at $4, food prices aren’t too far off their highs… do you REALLY think the Fed will kick off more QE in this environment… during an election year? At a time when the Fed is becoming a hot topic in the election?
If the Fed did this, Bernanke et al might as well brush up their resumes because the Fed would be dismantled. The political environment in the US absolutely will not tolerate more QE unless we get a Crisis first.
Case in point look at the IMF which is essentially a US-backed bailout fund: how many times has Europe looked to the IMF for more money? How many times has the IMF said “No”? A dozen perhaps?
On top of this, politicians and Wall Street are already looking for a scapegoat to pin the 2008 Crisis and ensuing fall-out on. Make no mistake, the fall-out from the bailouts/ corruption/ behind the scenes deals is far from over. Many folks got a “get out of jail free” card for four years… that doesn’t mean those cards don’t have expiration dates.
The markets and economy have been maintained by a very tenuous balance of policy and talk between the Fed, Wall Street, and Politicians. But as push comes to shove, and REAL litigation starts, these relationships will crumble and sacrifices will be made. The Fed knows this as do all of the connected power elite. Why do you think Goldman’s CEO hired a high profile defense attorney, Tim Geithner is trying to get out of being subpoenaed, and Bernanke is running such a massive “the Fed is great” PR campaign?
Simple answer: litigation is coming in the future and everyone is playing damage control.
With that in mind, the Fed’s hands are tied until a Crisis hits. Judging by the look of things, it’s going to be coming from Europe’s banking system: a $46 trillion sewer of toxic PIIGS debt that is leveraged at more than 26 to 1 (Lehman was leveraged at 30 to 1 when it went under).
So if you’re not already taking steps to prepare for the coming collapse, you need to do so now.
With that in mind, I’m already positioning subscribers of Private Wealth Advisory for the upcoming collapse. Already we’ve seen gains of 6%, 9%, 10%, even 12% in less than two weeks by placing well-targeted shorts on a number of European financials.
And we’re just getting started.
So if you’re looking for the means of profiting from what’s coming, I highly suggest you consider a subscription to Private Wealth Advisory. We’ve locked in 44 straight winning trades since late July (thanks to the timing of our trades), and haven’t closed a single losing trade since that time.
Because of the level of my analysis as well as my track record, my work has been featured in Fox Business, CNN Money, Crain’s New York Business, Rollingstone Magazine, and more.
To learn more about Private Wealth Advisory and how we make money in any market environment…
Chief Market Strategist
Phoenix Capital Research