The Ongoing Crisis

Hi,

Think about the following:

  • The UK’s Bank of England for 38 months (yes months) have held Interest Rates at near 0.5%
  • They’ve Issued Millions in QE
  • Has this stimulus worked?
  • Clearly not, so if they know what they’re doing how come the recession (depression) is ongoing?
  • QE CREATES inflation, why issue more of it due to the devastating effects of Hyper-Inflation?
  • QE can be issued to starve off DEflation – could this be the reason for issuance?
  • Gold is a tradeable market, everyone’s talking of hyper-inflation, many people are buying physical metals to use as money – why’s the gold market crashed of late then?
  • Has this notion of Hyper-Inflation reduced significantly to reflect the current price of gold? – The truth is Hyper-Inflation is the expected outcome so logically the price of gold should have continued to rise as everyone who believes Hyper-Inflation to be on it’s way buys gold and silver – obviously someones sold it off pretty hard so they can’t be that convinced.

Why is the economy now back in recession, if they have the ability to control things and kick start the economy?

Dedicated readers (& students of mine) of this site know what’s going on, they understand how the markets work and how effective governments and central banks are during these times.

I’m not going to fully spell it all out as I’ll be here for hours typing away and you’d have reams of pages to fully consider everything, but here’s a few bullet points for you to digest and explore further should you wish:

  • The main stock markets have since 1999 moved sideways – why is that?
  • If key agencies such as the government & Bank of England have the ability to save the country, economy and people from financial misery – why don’t they?
  • Following on, if they could help, why is the action they’re taking not worked so far?
  • The most important age group for governments is the 50+ age group – why? – because they bother to vote, Which section of voters are being and have been hit the hardest since 2008?  The over 50’s, because they represent those with the highest proportions of savings and they rely on those savings in the form of money in the bank earning interest, this is the safest form of saving – some of those over 50’s will be retired and rely on the interest on their savings to support them throughout retirement – so to this group of people the interest rate is of vital importance – If the government had control of it why would they punish the very people who they rely on for votes?  Logically if governments controlled rates this is voting suicide as they’ll lose the votes of the very people they rely on to be re-elected!  Think about it.
  • What causes these bad times? and what causes the good times?
  • What can we do to protect ourselves now and if this ever happens again?
  • Ref the Gold point – this could take pages to explain, but the simple point is Gold is a market and all markets are subject to the natural laws of growth and decomposition

You have all the answers on this site, some you’ll need to purchase, read and learn, but all the answers are available for those that have the desire to search on this site.

As with everything of importance you will not find the solution in 10 mins, I’ve spent months researching over the years (most of it full-time) I’ve still not fully finished my intended research.

What most people want are concrete answers – this does not exist in financial markets – this is why during times of recession and bad times government response is basically inadequate and ineffective.

As I’ve mentioned many times before, being a buy and hold investor throughout a bear market is pointless and frankly risky, being a trader is the right course.  The time to be a buy and hold investor is when the next bull market starts – this I will do for my long-term holdings but I still like to keep control of matters and will be a partial trader – remember, even during a bull market there are severe market corrections at certain points!

To conclude – Think about the wider implications of the above, the experts will tell you all the answers – yet recovery fails to materialise!

Bull markets create an atmosphere of laziness, bear markets force you learn.

The Hovis Trader

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