Get ready for QE4!

Not kidding! It has been our contention all along that the last thing Janet would do is raise rates and if the markets got in any trouble or the economy starts to slip, some sort of QE4 would be right around the corner.

Well…first off, the economy is slipping. We have always thought that an economy which had been lifted and interfered with on an orgy of 0% rates and printed money…is not a real economy. Same goes for the markets. In recent years, our central bank made it their job to interfere in ways we have never experienced. That is how you get bubbles and crashes. It is not just easy money any more. It is easy money on massive steroids…and now it is worldwide.

As far as the market, notwithstanding more central bank noise, it is now under severe pressure as “risk” is coming off very quickly. There are lots of top formations now being put in. Yes…we know we are just off the highs but one must remember, there has not been a decent correction in over 2 years and no real bear market since the 09 lows. Again, our central bank has done their best to prevent normal ebbs and flows in the economy and markets…thus bubbles and crashes.

As usual, we take things day by day and as we said during the October swoon, we suspect Janet and friends will speak up soon as they they always do when the market drops. We expect talk of “maybe we don’t need to raise rates so soon” or “if need be, we would have another round of QE!” Just remember that in October 2014, Japan and Europe, in a coordinated effort with the U.S., went on their own orgy of money printing…which turned the market back up. There is an agenda.

Lastly, We have been the loudest voice on the street telling everyone that the biggest non-bond market bubble was the BIOTECHS. We are now seeing articles written about this but most are missing the real bubble and that’s the fact the wonderful people at the investment banks have again foisted upon an unwary public a crapload of nothingness. What is nothingness? How about over 130 IPOs with NO SALES? We are talking about a good $100 billion buckos of NO SALES BIOTECHS. They are to blame but of course, the public is to blame also for scooping them up regardless of company or price. Greed is a strong emotion. Again, we don’t know when it ends. Maybe it is starting now. We just know based on precedent, it aint going to be pretty when the music stops. Value and valuation eventually matter.