Wall Street is experiencing a rough day. Facing serious headwinds on two
fronts, it is experiencing a sharp drop in prices as investors continue to be
finicky and nervous.
Uncertainty is the name of the game, and you better believe that there is
uncertainty out there - real and clear uncertainty, not this bogus nonsense
that the FED puts out.
Two reasons why the markets are being effected so significantly today are:
one, the previously mentioned farcical FED,
and two, the highly unstable North Korea.
The threat to the markets that the FED is currently posing is complete and
utter nonsense. It is MOPE. What we have is a voting member of the Boston
FED, Eric Rosengren, who stated that the FED is facing significant risks if
it waits to long to raise interest rates.
He believes that the FED needs to act and gradually start raising rates.
ALTHOUGH, it is unlikely that the FED would raise rates too fast, he then
went on to explain.
Meanwhile, on the other end of the aisle, we have another voting member of
the FED, Governor Daniel Tarullo, stating that he would like to see inflation
rise before rates are increased. ALTHOUGH, he is not ruling out the
possibility of a rate hike later this year.
You see what they are doing here? This is a prime example of MOPE in
action - you can't make this nonsense up. One member of the FED comes out and
sounds hawkish, yet ends dovish. Another member of the FED comes out and
sounds dovish, but ends hawkish. What are they doing? Attempting to make our
heads explode in confusion?
The latter point, although blunt, is in a roundabout way what they are
aiming for. As I've stated before, the FED is just extending and pretending,
trying to keep the markets in a state of limbo until the elections are
completed. The last thing they are going to do is raise rates and tank the
establishment's candidate of choice, Hillary Clinton.
So, let's chalk this threat up to nonsense and nothing but noise.
On the other hand, we have another slight, minor, tidbit of a problem affecting
the markets: the news of North Korea testing a nuclear weapon. This is a real
threat and problem, although likely not in the immediate term.
I personally have seen North Korea with my own eyes while on deployment in
the military and can tell you that this is a downtrodden and economically
depressed country. They are nowhere near capable of acting on the threats
they make, although their radical and crazy leadership cannot be dismissed
entirely from doing something completely irrational that would result in
their own decimation.
Remember, that the world is a powder keg and real and artificial threats
exist that could tank the markets at anytime. Ignore the noise, but filter
through it nonetheless.
Those who act first will be the winners, while those that are ignorant and
uninformed will undoubtedly be too late and thus the loser when this system
comes crashing down.
|
Nathan McDonald is a libertarian, entrepreneur and precious metals
enthusiast. He has always taken a keen interest in free markets and
economics since an early age, which naturally led him to become a true
believer in precious metals and all that they stand for.
Nathan served eight years in the Royal Canadian Navy as an
electronics technician, seeing the true state of the world, before starting
his first successful business. He has since gone on to create a number of
businesses, all of which are still in operation and growing.
In addition to this, Nathan runs a network of successful precious
metals blogs, and a growing newsletter that has attracted readers from all
around the world.
He is a regular and highlighted writer for the highly respected
Sprott Money Blog, which covers world events, geopolitics and of course
precious metals.
|
The views and opinions expressed in this material are those of the author
as of the publication date, are subject to change and may not necessarily
reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the
accuracy, completeness, timeliness and reliability of the information or any
results from its use.
