The Fed Tapering QE
I was just on Monday saying to GFL Platinum clients that the Fed is likely to Taper in the next quarter and what to do if they do. I told them to prepare for a $1-$1.50 drop in the price of Silver if they do taper and currently we’re $0.67 down.
Now, what does this actually mean? In reality, nothing. However they needed to do it. Let me explain… They’ve decided to not print $85bn a month, but print only $75bn a month. This still equates to $900bn a YEAR.
The $10bn a month does not have much of an effect on the markets at all. However what the Federal Reserve has done is give Wall Street a clear message, we’re reducing money printing, however interest rates don’t look like they’re going up until 2015. So, borrow away! Instead of printing the money & giving it to you, we’ll just let you borrow it at 0%. Get it?
My Gold & Silver Predictions For 2014.
1. Gold & Silver price will bottom, if they haven’t already, by the end of the first quarter of 2014, and then reverse to the upside at a pace we have never seen. It’ll make 2011 look like a stable rise.
2. New “re-branded” form of Quantitative Easing will come into effect by the end of 2014.
3. By the end of 2014, Quantitative Easing will be HIGHER than $85bn a month. Yes, they’ll increase it.
4. Actions will be taken by the Federal Reserve to stimulate money supply increase to main street to stimulate spending to avoid deflation. As spending increases, interest rates will spike, real interest rates. As interest rates spike, temporarily, this will cause a problem again in the housing market & the stock market, this will force the reduction of interest rates again, and an installation of a permanent long term quantitative easing.
5. Gold & Silver will break previous upside price records by end of Q4 2014 with leeway to Q1 of 2015.
6. The Dow Jones is due for a huge (25-50%) market correction in 2014.
Agree/Disagree with my predictions? What are your predictions? Please let me know in the comments…