The Fed’s Drugs Won’t Work Anymore
The Fed’s Drugs Won’t Work Anymore
QE3. No QE3. The markets have been injected with this hopium for months and have been let down on every occasion except for this last one. The Fed’s issuance of this last round of quantitative easing has rendered future doses of this drug ineffective.
It was explicitly stated that the Fed would issue QE as needed in unlimited amounts until the market is able to create enough jobs to stimulate dramatic growth. This means that there will not likely be any future spikes in the market as a result of another QE announcement…the market no longer questions whether or not more drugs will come, now they expect them.
The Fed had been using “QE hype” to rally the markets. Every time we were on the verge of a collapse another QE announcement would be made bringing us a few feet back from the fiscal cliff. But that tactic wont work anymore…
The Fed’s actions are fiscally irresponsible and the U.S. will quickly suffer the consequences of this poor decision. If the economic change needed to return to growth is structural then a monetary fix, or QE, isn’t the remedy.
The U.S. Dollar is on the decline against other major currencies, and investors are losing confidence in the Fed’s ability to manage the ensuing risk of another recession. Question that remains, what happens when the QE drug gets taken away?
It’s time to hedge; if the value of the U.S. dollar collapses how will you respond? Diversification is key. Learn to manage your risk by looking a head; join the Forward Thinking waiting list now.
Your currency analyst,
Justin Burkhardt
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Post Written By: Justin Burkhardt
Currency Strategist for FXFocus.com and editor of the Currency Situation Report and Forward Thinking. An active currency trader, my goal is to educate new and experienced traders alike to take advantage of the inherent volatility that exists in the Forex market.
My Objective? Winning trades. I implement strategies and tactics that help me to identify high probability trade set-ups. Approaching each trade with insight into the driving forces behind the market, I keep profit targets conservative. Long-term viability and volatility do not go hand-in-hand in this market. I strive to maximize reward while minimizing loss.
I have been formerly educated and mentored in Elliot Wave, one of the most advanced analytical methodologies in the world, which is highly utilized by both investment firms and Hedge Funds everywhere.
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