Friday, 14 September 2012

QE3 Hooray in Wallstreet! But how good will it be for the economy?

Dear Friends,

I think this is the last straw Ben Bernanke pulled out of his hat. He definitely did his best to help Obama's election! Well, he is employed by the president, right?

The central bank said it would purchase $40 billion of mortgage-backed securities every month until the labor market improves. The Federal Open Market Committee also said it would likely keep the federal funds rate near zero through at least the middle of 2015.

$40 billion per month with no duration said, seems like what Europe also promised last week, as Mario also said "unlimited" bond buyback... I think both have them seem to have the same thinking.

I think Ben Bernanke play this game very well today. Who knows what will happen when Obama gets reelected? This is probably the only way of not injecting too much cash to increase inflation and satisfy the public and Wallstreet thirst for a QE3. Isn't it better than promising $600billion across 2 years?

The funny thing is that whether it is $600billion across 2 years or $40billion per month with no duration is the same money spent! Just that people like the latter. The word "UNLIMITED" with no dateline sounds infinite! This market is tricked again....ha... SHREWD Bernanke wins the day again... this guy is smart, no doubt!

I have been talking about how clever this guy is, he is one good Wallstreet trader, understand the market psychology so well!

The thing is what is our gameplan now?

 I have been talking about the gameplan all week, and everything so far has gone according to plan.

1) The Silver and Gold ETF did indeed burst forward and climbs higher into the day. So this is definitely one instrument you can look at...

2) I mentioned that the most direct beneficiary of the $$$ is the banks! See how Bank of America and JP Morgan is surging... Now Bank of America is shooting past $9, moving towards $10...

3) With these 2 countries, US and Europe pumping tons and tons of $$$ into the stock market, we really expect the stock market to be booming into year end! Mid term wise, any drop should be taken as opportunity to enter!

Rgds
Daniel
www.danielloh.com

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Btw we will be talking about how this QE3 will affect currency....Do come to our Forex class next week to learn the secrets of Currency trading!

Up Coming Free FOREX introductory Seminar! 基础外汇课程

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1) Basics of Forex
2) How to generate a passive income form it
3) Does indicators work in FOREX
4) Money management practices needed in Forex

Date: 18 Sep 2012, Tuesday 7pm - 10pm    (English) or 
Date: 19 Sep 2012, Wednesday 7pm - 10pm   (Chinese 华文)
 
Speaker: Lionel Leow

Venue: 141 cecil street, Tung Ann Association Building
            #07-02 S(069541),
            Tanjong Pagar MRT exit G, walk straight 80m, opp traffic light


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