Yesterday’s Federal Reserve announcement of further quantitative easing via monthly purchases of Mortgage Back Securities (MBS) sent stocks higher on big volume. Perhaps those on the sidelines will be forced back into the market, but that remains to be seen. Yesterday’s move wasd done so on very heavy volume suggesting institutions were busy buying up shares a very healthy sign for the market going forward. Our uptrend started back in the summer continues to power forward and we have yet to see signs of it ending any time soon.
Gold and silver along with platinum pushed higher as many commodities have with the decline in the dollar. Since the fed is monetizing mortgage debt they are simply printing money. The end game here is unknown as the Fed’s excuse is a week jobs market. However, the endless printing of the green back will have reprocussions. Higher inflation is a tax on the poor and with lowered purchasing power they will rely more on the government to fill the gap. This endless circle will only get worse until a structural fix is put in place.
Now we have the Federal Reserve and ECB out of the way we still have the ongoing threat of the PIIGS needing more money. The European debt crisis is a downward spiral and until deleveraging is played out fully we’ll continue to see issues from the European nations. Fun times, but for now all we care about is we are in an uptrend!
Have a great weekend.