Wall Street is experiencing a rough day. Facing serious headwinds on two fronts, it is experiencing a sharp drop in prices as investors continue to be finicky and nervous.
Uncertainty is the name of the game, and you better believe that there is uncertainty out there - real and clear uncertainty, not this bogus nonsense that the FED puts out.
Two reasons why the markets are being effected so significantly today are: one, the previously mentioned farcical FED, and two, the highly unstable North Korea.
The threat to the markets that the FED is currently posing is complete and utter nonsense. It is MOPE. What we have is a voting member of the Boston FED, Eric Rosengren, who stated that the FED is facing significant risks if it waits to long to raise interest rates.
He believes that the FED needs to act and gradually start raising rates. ALTHOUGH, it is unlikely that the FED would raise rates too fast, he then went on to explain.
Meanwhile, on the other end of the aisle, we have another voting member of the FED, Governor Daniel Tarullo, stating that he would like to see inflation rise before rates are increased. ALTHOUGH, he is not ruling out the possibility of a rate hike later this year.
You see what they are doing here? This is a prime example of MOPE in action - you can't make this nonsense up. One member of the FED comes out and sounds hawkish, yet ends dovish. Another member of the FED comes out and sounds dovish, but ends hawkish. What are they doing? Attempting to make our heads explode in confusion?
The latter point, although blunt, is in a roundabout way what they are aiming for. As I've stated before, the FED is just extending and pretending, trying to keep the markets in a state of limbo until the elections are completed. The last thing they are going to do is raise rates and tank the establishment's candidate of choice, Hillary Clinton.
So, let's chalk this threat up to nonsense and nothing but noise.
On the other hand, we have another slight, minor, tidbit of a problem affecting the markets: the news of North Korea testing a nuclear weapon. This is a real threat and problem, although likely not in the immediate term.
I personally have seen North Korea with my own eyes while on deployment in the military and can tell you that this is a downtrodden and economically depressed country. They are nowhere near capable of acting on the threats they make, although their radical and crazy leadership cannot be dismissed entirely from doing something completely irrational that would result in their own decimation.
Remember, that the world is a powder keg and real and artificial threats exist that could tank the markets at anytime. Ignore the noise, but filter through it nonetheless.
Those who act first will be the winners, while those that are ignorant and uninformed will undoubtedly be too late and thus the loser when this system comes crashing down.
Nathan McDonald is a libertarian, entrepreneur and precious metals enthusiast. He has always taken a keen interest in free markets and economics since an early age, which naturally led him to become a true believer in precious metals and all that they stand for. Nathan served eight years in the Royal Canadian Navy as an electronics technician, seeing the true state of the world, before starting his first successful business. He has since gone on to create a number of businesses, all of which are still in operation and growing. In addition to this, Nathan runs a network of successful precious metals blogs, and a growing newsletter that has attracted readers from all around the world. He is a regular and highlighted writer for the highly respected Sprott Money Blog, which covers world events, geopolitics and of course precious metals. |
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