I pointed out last Sunday that in response to the ongoing capital flight from crisis affected European nations, the US Federal Reserve have resorted to the contraction of its balance sheet which may further prompt for a decline in money supply. This may have been compounded by the culmination of Operation Twist.
Chart and the following quote from goldmoney.com
Simply put: the more sluggish money supply growth is, the more likely it is that we see a stock market and broader economic crash that would make 2008 look like child’s play.
Since US Federal Reserve is likely to respond forcefully to any material convulsions in the financial markets, a “crash” does not seem inevitable (yet). But this should NOT be discounted.
Like it or not, expect further turbulence and volatility ahead.
Be careful out there.
No comments:
Post a Comment