Double QE, rosy short term outlook but gloomier long term

my forecast last time is that QE likely coming sooner and it did from QE of ECB. QE from the us will not be far behind if you look at gold price and the euro/usd exch rate. the usa could not afford to let euro fall too much, so QE must come. how effective will QE from the fed be, we will talk about this later.

the island top formation is now distorted. like i said earlier i have never seen an island top of that size this turns out to be a booby trap.

QE from the fed has shown to be less and less effective, but it has disastrous results on the emerging economies esp china, this is why you see the shanghai composite index is way down after various rounds of QE. do go back in this blog on a topic stock indexes, the conclusions drawn are still valid.

new research from many economists has shown that debt has grown so much that QE may no longer be effective as the percentage of money created by QE vs the money supply is growing smaller and smaller each time.

politicians have now relied too much on the fed to do their jobs and do not have the political will to rein in spending or they are afraid to see society getting into an anarchy ie they no longer can command law and order. even developed economies may begin the disintegration into Libya or Egypt state.

because so much is diverted to the state that private sector cannot get the credit needed to grow and consumers cannot get mortgage or other loans unless you are a AAA rated consumer.

all these will eventually show up in the profits of public companies and thus the stock market.

with oil prices hovering around 115 or even higher in due course, europe will only go deeper into recession.

in the next few years, the baby boom generation will get into retirement in large droves, so if governments do not do the right things soon, eventually we might be having much higher inflation, the inflation these two years will look rather mild.

HSI, GOLD, QE coming sooner?

HSI
this is a chart waiting for a top to be confirmed [not formed] as the island top has been formed, so therefore the next day or two is important that it will not fill the gap on the right, otherwise the formation is distorted,

rsi indicates there is room to fall if the island top is confirmed.

i have never seen such formation in the course of my investment life, usually an island is only composed of a day or two either at the top or bottom, never an island of 10 or more days. maybe govt is interfering too much so everything is distorted.

usually after an island top or bottom is confirmed expect a one way blowout or fallout of at least 2000 points.

GOLD
the recent shoot up in gold is likely a short covering or QE coming sooner? ECB officials did not show up at Jackson Hole, any hints!!!

the gold chart indicates it will hit 1730, if there is less than 50 to gain, just wait a while.  also follow it closely if you have taken position since the top may not last too long for you to close out the position.

rsi indicates it will top out pretty soon, would then the fall coincides with the hsi fall as well?

QE and possible Consequences

an OECD economist has written a paper available as below:
http://dallasfed.org/assets/documents/institute/wpapers/2012/0126.pdf

this paper should be read by the young and old as it looks likely to affect many generations.

this paper might help you plan your investments for retirement or check the pension plan out offer by your employer, government to see whether they are adequate.

the paper looks technical but in fact it is not quite, an ordinary economics student can read through with ease. the trouble is do you have the patience since there are 37 pages to read, yet each page is quite short.

for those of you who like to jump to conclusion can read page 36-37, then read through the rest when you have more time.