When Push Comes To Shove

Posted at 7:35 PM (CST) by & filed under General Editorial.

Dear CIGAs,

October 30th the Fed is planning to curtail QE regarding Treasury auctions.

November 4th is the FOMC meeting most likely to contain discussions of timing for the exit from economic stimulation.

November 7th is the G20 meeting at which BRIC nations will anticipate a cessation of QE and a commitment to establish a currency alternative to the US dollar.

Plus two other interesting events.

1. A Bradley Day
2. Consideration of the DaVinci Ratio

So fasten your seat belts because our long discussed rock and hard place will be reached shortly.

Can the Fed provide the Chinese with their demands of middle July at the USA/Chinese Washington Financial Summit in a deal to buy US Treasuries so as to let the Fed back off their US Treasury instrument auction QE.

Will the market reaction to this strategy actually prevent this strategy?

Will the present administration be comfortable with the price of the continuance of Chinese buying of US Treasury instruments?

Will the upcoming Bradley Day signal a change in the equity market rally since last April?

The DaVinci mathematical ratio does not support a top in gold of any merit here nor does it support a bottom of any merit in the US dollar.

So there is the witch’s brew we have been counting down to. The point where push comes to shove. Where theory becomes actuality. Where the desires of the Fed faces off an administration’s desire to maintain its present strong political control. Where the equities market could end their 1932 rally.

All of this occurs with no indication of a top in gold or a bottom in the dollar of real merit.