Jim Sinclair writes:
Chair Yellen has placed herself between the rock of recession and the hard place of playing the hawk. A global recession cannot produce an isolated USA, but rather underscore the heart of the recent US economic figures as a reflection of an insular American economy following the world back into recession, not entirely extremely cold weather related. You might note that China has not had as much of a weather problem yet and is experiencing degrees of contraction in the spectacular rate of growth previously present.
The idea that stimulation, even if only in form but not reality, can be withdrawn without draconian economic results is simply false. Chair Yellen is truly dedicated to full employment and is going to go into shock over the next few short months at the divergence between her economic modeling, the behavioral economic projections and the degree of economic contraction in the US. She will revert to her long standing dovish viewpoint of the mandate of the Federal Reserve and move this hyper stimulation (4 trillion) into a higher gear than before.
Both the stock market and the gold market will reflect this in substantively higher prices. One should never forget that the wheels of the equity markets and gold is liquidity, which represents debt presently and nothing more.
I am presently 13 hours ahead of you in Hong Kong looking out of my window in contemplation of mainland China where nothing has changed. China may look like a free enterprise exercise, but it is far from it. This is a Maoist country that will handle a contraction of its economic activity in a much different way than the hoards of Ivy League analysts populating Wall Street, the City and the Bahnhofstrasse believe. There will be a unified pulling together of ...