The End Of Quantitative Tightening

As I forecast from the day the Federal Reserve first announced its plan to shrink its balance sheet, it now admits it will abort the process long before it's finished. I also forecast that this policy reversal would be a precursor to a return to quantitative easing (QE). That forecast will soon come true too.

More People Are Going To Wake Up To The Benefits Of Owning Gold

We've entered a bear market and we're now in a correction, we're having a rally in a bear market in the US. But I think this is early in the bear market so as that grinds down, as we make new lows and as inflation really starts to take a toll on the real value of people's savings and their investments (not just their stocks but in particular their bonds, their savings the cash value of their insurance policies) as inflation too starts to erode away their purchasing power, more and more people are gonna wake up to the benefits of owning gold.

The Primary Trend In Stocks Is Down

Because the bubble popped we entered a bear market in the US. Right now we're having our first correction in that bear market where you get a rally.

In a bull market the corrections are down. Well, in a bear market the corrections are when the market moves up and I think we're in one of those right now but I think the primary trend in stocks is down.

2008 Was Just The Warm Up

The 2008 one was just the warm up because the central banks were able to delay the consequences until the next crisis which is the one into which we are now headed. 

I believe this bubble has already popped except the air is only just starting to leak out and I think we're headed for a much worse crisis in the United States in particular that will actually end up being a sovereign debt and currency crisis.

Powell Does Not See Any Risks Of Asset Bubbles

Chairman Jerome Powell says the Federal Reserve does not see any risks of asset bubbles, excessive debt, or inflation. Given that no one at the Federal Reserve saw those risks in 2000 or 2008, nothing has changed. Since the current risks they are blind to are much larger, they will be blindsided by a larger crisis.

A 180 Degree Turn On Monetary Policy

If you look at Fed Chairman Powell's most recent comments he's now backing off of his talk about continuing to shrink the balance sheet and maybe not raise interest rates anymore and so that's kind of reflating the bubble a bit but I don't think that's enough to do it.

I think the air is still going to come out of the bubble. The interest rate hikes that have already taken place are too much for the over-leveraged US economy to bear. so I think the Federal Reserve ultimately is going to go back to zero interest rates. It's not just about to slowing down the shrinking of the balance sheet. 

I think they're gonna blow it back up even bigger with QE4 and of course when the Federal Reserve surprises the markets by doing a complete 180 on monetary policy, I think that you're gonna see the bottom drop out of the dollar and that's when you're really going see a big bid in the gold market.