"The bottom line is operation twist will be a miserable failure just like QE1 and QE2."
Interesting. I'd have said the bottom line is that Bernanke, Obummer and the U.S. are just about finished.
The Next Selling Wave is About to Begin
Posted Wednesday, 21 September 2011
By Toby Connor, GoldScents
As many of you already know I expected the dollar index to put in a major three year cycle low sometime this year. The normal timing band would have been for a bottom in the spring. The recent breakout and move to new highs has confirmed that the May bottom did in fact mark the three year cycle low. As expected that also marked the top of the cyclical bull market in stocks.
It's widely expected that the Fed will announce operation Twist at today's FOMC meeting. Obviously if printing several trillion dollars didn't save the economy, then rotating the Fed's balance sheet from short-term interest rates to long-term in the attempt to hold down the long end of the yield curve isn't going to have any effect at all as the approaching recession intensifies. Interest rates are already at historic lows.
Interest rates aren't the reason why people are not borrowing. With continued high unemployment There simply isn't enough demand for businesses to expand their operations. The American consumer is so deeply in debt that he can't service it. Unfortunately, we can't print money like the US government so it doesn't help us to go deeper into debt. The US consumer will not be borrowing money any time soon.
The bottom line is operation twist will be a miserable failure just like QE1 and QE2.
The stock market, and gold are now moving into the timing band for the next daily cycle low (selling event). The only question now is whether the announcement of operation Twist this afternoon will initiate a short term knee-jerk reaction higher, or whether the market will immediately continue to sell off into that next cycle low that is due to bottom sometime in the next 11 days.
Full story: http://news.goldseek.com/GoldSeek/1316613840.php
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