China’s Preparing for the End Game – Are We Paying Attention?

For three thousand years China has been at the forefront of monetary innovation. It was the first to legalize gold money in the tenth century BC and two millennia later it issued the world’s first paper currency. Fast forward to 2012 and China is at it again, eclipsing Australia as the largest producer of gold and increasing its monetary gold reserves at an alarming rate. Five years ago China surpassed the US in gold production and five years from now it will own more gold than the US Federal government.




China?s Preparing for the End Game ? Are We Paying Attention?

New poll on forum homepage, vote there and discuss here. What is the best QE3 play right now?

- Long equities and indices
- Short equities and indices
- Long MBS
- Short MBS
- Long gold
- Short gold
- Long treasuries
- Short treasuries

Mike

I will definitely be in the minority as I have suggested long treasuries.

Realistically, it would be appropriate to vie for long securities, but IMO, I feel the rubber is starting to lose traction and if something does go wrong, God help looking for market makers.

There simply is no liquidity.


ZB et al will be the first port of call.

Trader


P.S I am long stocks and every day I shift a little in my seat adjusting stops .

3 votes for long bonds?

patbateman 

3 votes for long bonds?

Equally surprised that I am almost alone in buying MBS

Mike

Big Mike 

New poll on forum homepage, vote there and discuss here. What is the best QE3 play right now? - Long equities and indices - Short equities and indices - Long MBS - Short MBS - Long gold - Short gold - Long treasuries - Short treasuries Mike

Long vega is a great move.

Poll closed, results:



Mike

FOMC Minutes: Half [AUTOLINK]The Fed[/AUTOLINK] Participants Said It Would Be Appropriate To End QE "Late This Year" | Zero Hedge

FED SAYS SEVERAL ON FOMC SAW QE TAPERING LIKELY WARRANTED SOON
FED SAYS MANY ON FOMC SAID LABOR GAINS NEEDED BEFORE QE TAPER
FED SAYS FOMC SAW FISCAL POLICY RESTRAINING ECONOMIC GROWTH
HALF OF THE FED INDICATED IT LIKELY WOULD BE APPROPRIATE TO END ASSET PURCHASES LATE THIS YEAR - NOT SLOW END
A FEW PARTICIPANTS INDICATED THAT THE COMMITTEE SHOULD SLOW OR STOP ITS PURCHASES AT THE JUNE MEETING - "OR STOP"

Mike

Quoting 

The Dallas Fed's numbers are consistent with a handful of other recent studies that have found crisis costs of anywhere from $13 trillion to $17 trillion to $22 trillion. The chart below, taken from the Dallas Fed study, shows just how pitifully far below potential economic growth the economy has been and will be, no matter how you define "potential economic growth."

PDF attached.

Mike

Looking around for an existing thread to post this... If the moderators know of a better thread please move it..

Worth of a watch on what 10+ years of free money has done to the economy.

On an anecdotal note, I keep hearing the same prediction for the 3rd and 4th quarters of this year. You have to wonder if they are right or if it will become a self fulfilling prophecy.

Robert

Quoting 

Stan Druckenmiller has said: “I’m sitting here staring in the face of the biggest and probably the broadest asset bubble, forget that I’ve ever seen, but that I’ve ever studied.”