The Tapering Denouement
Well, it had to eventually happen; the "tapering denouement," in which the Fed admits it "may taper" later this year. Not stop, but taper; and it just "may" do so. And mind you, ZIRP will remain until "at least 2015," so any thought that monetary easing is about to end is ridiculous.
The global economy is plunging; and indeed, China's money markets froze this morning - causing the PBOC to bail out at least one bank. Rising interest rates will wreak havoc on the ENTIRE WORLD; starting with sovereign nations. This can only end as in 2008; albeit, starting from a MUCH lower point; wherein, the ONLY economic "strength" is the Fed-created U.S. housing bubble that I can hear deflating as I write.
PAPER PMs are under attack as in 2008; and yet again, I anticipate a MASSIVE PHYSICAL response. This could be the "Big One," so PROTECT YOURSELF, and do it NOW!
Andrew C. ("Ranting Andy") Hoffman, CFA
Miles Franklin Ltd.