What’s truly worrisome is that the Fed is hell bent on enacting the exact same policies that have created the Dollar collapse (and the rally in stocks) over the last few months, namely, additional Permanent Open Market Operations (POMO) ramp jobs. The name sounds clever, but it really just consists of the Fed buying US debt from the large private banks, which in turn take the Fed’s money and buy stocks.
Indeed, the Fed just announced it will be monetizing an additional $32 billion worth of US debt in the next few weeks. The schedule for these ramp jobs is as follows:
In plain terms, the Fed is going to keep doing what it’s been doing: trashing the US Dollar to pump stocks. And it’s going to do this to the tune of some $10 billion per week over the next month.
- October 15:
- October 18:
- October 20:
- October 22:
- October 26:
- October 28:
- November 1:
- November 4:
- November 8:
Thus, as ridiculous as it sounds, the stocks up/ US Dollar down trend of the last two months is likely to continue into early November. But if the US Dollar doesn’t bounce soon and start rallying with force, we’re heading into a VERY nasty period.
Friday, October 22, 2010
Trashing the dollar to pump stocks
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