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Gold and Silver Sell Offs Are Precious Metals Bull Market Investment Opportunities
Commodities / Gold and Silver 2011
May 05, 2011 - 12:55 PM
"One must take advantage of sell-offs in gold and silver miners; they are opportunities to get on board the secular bull market in precious metals."
The Sinking of QE2
You'll recall that QE2 -- the fancy name for the Fed's market manipulations -- ends June 30. There is no particular reason why that date should be anything special. It's the official end of QE2. But the market will likely anticipate the end of QE2 before it actually ends.
As Barron's put it recently:
"Just as risk markets began to rally months ahead of the actual start last November of the Federal Reserve's program to purchase an additional $600 billion of Treasury securities, these same markets may be beginning to anticipate the end of the central bank's buying."
If this holds true, then the market ought to fall as QE peters out, all other things being equal (which they never are).
There are many ways to show how the Fed is turning the market into its own personal yo-yo. The easiest way to see how the market spins up and down with a jerk of the Fed's massive balance sheet is to plot the two against each other. When the Fed expands its balance sheet (by buying stuff, thereby putting money out there), the market rises. When it contracts its balance sheet (by selling stuff, thereby taking in cash), the market sags.