Well the combination of weak breadth and slightly flat finish for most of the indices seems to have triggered some bearish signals for this week as mentioned by my quant subscriptions. Cumulative ticks trended lower all day and finished at -50,000 and volume was very strong on Friday if that is any guide.
Treasuries also got hammered last week so I'm not sure if that is another sign. Not sure if Big Ben's plan is going to work either. The Fed wants higher inflation and will surely get it but at what cost? Surely no one will want to buy UST's and the Fed will not just be the marginal buyer but the only buyer before too long. What happens then, they just keep buying the stuff and the USD becomes worthless? Is this an indirect shot at getting the Chinese to re-value the Yuan? Besides who benefits from higher inflation? The thinking is that this is so businesses can regain pricing power and increase the prices of goods to the consumer? Nice theory but they forget that the consumer is all tapped out and have too much debt. How can you possibly keep spending money you don't have? It's not like the Fed is giving us the money they are printing. Nope that's going to the US government to fund their liabilities which they can't meet by the way. Perhaps that is the real reason then??
Well given that the BOJ, the ECB and the BOE are all going to do it in one form or another it appears that the secular trend of all fiat currencies are going to become worthless. Gold to $2000 an ounce then?? Maybe.....at the rate we are going.....
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