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Gary Kaltbaum
is an investment advisor with over 18 years experience, and a Fox News Channel
Business Contributor. Gary is the author of
The Investors Edge. Mr. Kaltbaum is also the
host of the nationally syndicated radio show “Investors Edge” on over 50 radio
stations. Gary is also editor and publisher of “Gary Kaltbaum’s Trendwatch”…a
weekly and monthly technical analysis research report for the institutional
investor. If you would like a free trial to Gary’s Daily Market Alerts
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FOX BUSINESS NETWORK OCTOBER 15
Here is what everyone got for their money since the fed went into overdrive.
Since the fed cut the discount rate the first time, the DOW is up 1100
points. The first 300 happened late Aug 16th when it was leaked that the fed was
going to lower rates in the morning. Another 300 points occurred the next
morning on the gap. Add the 300 on the latest cut and you have a direct 900
points from the fed. This does not include the incessant calls by the minions
that everything is a-ok. This does not include the hundreds of billions of
dollars the fed has sent into the economy. So…the fed said they will not bail
out markets…but that is exactly what they did…at least for now. So…what
else. Did the fed help the home buyers?
Long yields are now skyrocketing. Why? Because the fed has now lost every
shred of credibility as an inflation fighter. They turned their back on the
longer-term consequences to patch up wall street in the short term. So while the
fed lowered rates, the more important market rates are romping. Mortgage rates
will go higher because of this.
The dollar is now dropping like OJ’s freedom. Couldn’t resist that one. Even
Saudi Arabia recognizes the fed’s short-sightedness. Saudi Arabia has refused to
cut interest rates in lockstep with the US Federal Reserve for the first time
ever. This signals that they are preparing to break their dollar currency peg.
There is now a growing danger that global investors will start to shun the US
bond markets…which is now occurring. The risk in cutting rates so aggressively
at a time when the dollar was already under pressure is now causing more
problems. Saudi Arabia has an inflation problem, just as China has an inflation
problem, just as other countries have an inflation problem . But thus far, only
we — with the weakest currency on the planet and the largest imbalances — have
cut rates.
Of course, GOLD forecasted all this as GOLD prices continue skyward.
That leads me to this statement:
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