AN UPDATE ON THE FED BALANCE SHEET. BY JONATHAN BRICE THE FED THE FED THE FED.
What are the best investments if the fed raises interest rate?
-
Upload
valbury-group-asia-division -
Category
Economy & Finance
-
view
387 -
download
2
Transcript of What are the best investments if the fed raises interest rate?
![Page 1: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/1.jpg)
What Are The Best Investments if The FED Raises Interest Rate?
By Nico Omer Jonckheere26 Agustus 2015
![Page 2: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/2.jpg)
Will and CAN The Fed Increase Interest Rates For The First Time Since 2006?
![Page 3: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/3.jpg)
“Actions Speak Louder Than Words”
![Page 4: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/4.jpg)
“Number of times in past 9 ½ years Fed gasbags have talked about hiking rates: 3767. Number of hikes: 0. Now talking about slowing rate rises?”
-- Tweet from Fred Hickey on May 27, 2015
![Page 5: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/5.jpg)
FOMC Reaction- Sept Rate Hike Odds Drop To 40%
![Page 6: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/6.jpg)
There are TWO REASONS why pressure is mounting for US Federal Reserve chairwoman Janet Yellen soon to start raising the cost of credit after six years of easy-money policies:
► Without higher rates, the central bank lacks its most powerful traditional weapon for combating the next recession – cheapening credit.
► Growing recognition that quantitative easing and zero rates have inflated a bubble in asset prices and driven related rising wealth inequality, yet failed to boost economic growth.
![Page 7: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/7.jpg)
5 Reasons Why The Fed Won’t Raise Interest Rates
1) An interest rate increase will make the DOLLAR even STRONGER than it already is.
![Page 8: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/8.jpg)
2) The Fed has been keeping their eye on INFLATION (deflation), but they haven’t hit the magic 2% inflation target since 2012.
![Page 9: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/9.jpg)
3) AMERICA is BANKRUPT and on borrowed time.
![Page 10: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/10.jpg)
4) Back in June, the IMF urged the Federal Reserve to delay a rate increase because of a still-struggling US economy and warned of “significant uncertainties as to the future resilience of economic growth.”
![Page 11: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/11.jpg)
5) The US stock markets are ADDICTED TO FREE MONEY so we may need a bigger balance sheet in the future.
![Page 12: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/12.jpg)
The Dow Jones Industrial Average has gone nowhere since October 31st 2014 – THE END OF QE3…
![Page 13: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/13.jpg)
The War Against Deflation
“I’ve said all along that the Fed will not tolerate deflation, and that it will do whatever it takes to keep the US economy from deflating. On this basis I do not expect the Fed to raise rates this year or next, and it would not surprise me to see the Fed bring in QE4 or something like it.”
-- Richard Russell
![Page 14: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/14.jpg)
What Should You Buy And What Should You Sell?
![Page 15: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/15.jpg)
Source: www.technicalindicatorindex.com
![Page 16: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/16.jpg)
Source: www.chartwatchers.com
![Page 17: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/17.jpg)
Source: www.clivemaund.com
![Page 18: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/18.jpg)
Source: www.clivemaund.com
![Page 19: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/19.jpg)
Source: www.clivemaund.com
![Page 20: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/20.jpg)
Seasonals are poor as Aug., Sept. and Oct. are the worst-performing months of the year.
![Page 21: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/21.jpg)
Summarizing “Investor” Thoughts Today (In 1 Cartoon)
![Page 22: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/22.jpg)
“I’m now predicting that we are going to see a global stock market crash before the end of the year. It’s not only going to be the Dow, it’s going to be the DAX, the FTSE, the CAC, Shanghai, and the Nikkei. There’s going to be panic on the streets from Wall Street to Shanghai and from the UK down to Brazil. You are going to see one market after another begin to collapse.”
--Gerald Celente
![Page 23: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/23.jpg)
The Shanghai index is currently showing some textbook Elliott wave behavior:
![Page 24: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/24.jpg)
Source: www.zerohedge.com
![Page 25: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/25.jpg)
![Page 26: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/26.jpg)
It should come as no surprise that fund managers’ positioning on EM relative to DM is the most extreme on record!
![Page 27: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/27.jpg)
While relative to history, the space is under-owned – by a lot:
![Page 28: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/28.jpg)
![Page 29: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/29.jpg)
This is the most important trend line in the world right now… which way next?
![Page 30: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/30.jpg)
GOLD
![Page 31: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/31.jpg)
Currently the “Gold Optix” is at its second-lowest level in history, undercutting even the low recorded in the year 2000, at the bottom of a 20-year bear market:
![Page 32: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/32.jpg)
![Page 33: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/33.jpg)
Source: www.clivemaund.com
![Page 34: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/34.jpg)
![Page 35: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/35.jpg)
2001 - $2602007 - $1000
1976 - $1051980 - $800
Ironically the asset class that will benefit most from RATE HIKES is the one traders least expect: GOLD!
![Page 36: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/36.jpg)
History Doesn’t Repeat Itself But It Does Rhyme
![Page 37: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/37.jpg)
Source: www.zerohedge.com
Gold bulls will cite the 1970s experience as to why they are not worried about the current slump in the price.
![Page 38: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/38.jpg)
Gold Bullion “Extremely Rare”
![Page 39: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/39.jpg)
Look forward to the second half of the year, when gold prices have historically seen a bump in anticipation of Diwali, which falls on November 11 this year, and the Chinese New Year.
![Page 40: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/40.jpg)
OIL
![Page 41: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/41.jpg)
Source: www.zerohedge.com
WTI Crude has been dropping for 8 straight weeks for the first time since 1986…
![Page 42: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/42.jpg)
![Page 43: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/43.jpg)
![Page 44: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/44.jpg)
Source: www.elliottwave.com
![Page 45: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/45.jpg)
Is Australia The Next Greece?
![Page 46: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/46.jpg)
Even though the Aussie dollar is a RISK ASSET, based upon underlying fundamentals, the Aussie dollar seems much more dependable and trustworthy than the “safe haven” U.S. dollar.
![Page 47: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/47.jpg)
But much more importantly, Australia’s government debt load is miniscule compared to that of the U.S.
![Page 48: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/48.jpg)
Stated simply, the Aussie dollar has been falling because COMMODITY PRICES have been falling.
![Page 49: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/49.jpg)
IRON ORE and COAL prices have been plumbing new record lows:
![Page 50: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/50.jpg)
Australian consumers are more worried about the medium term outlook than at the peak of the financial crisis…
![Page 51: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/51.jpg)
…as China plumbs new depths in MANUFACTURING, just piling on Australia’s woes:
Source: www.zerohedge.com
![Page 52: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/52.jpg)
![Page 53: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/53.jpg)
![Page 54: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/54.jpg)
All eyes are on AUD as it is currently testing a very long-term trend line:
![Page 55: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/55.jpg)
![Page 56: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/56.jpg)
![Page 57: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/57.jpg)
CONCLUSION
I would not be surprised to see the Australian dollar bounce along the bottom here for a while. But over a two- to three-year time frame, the Aussie looks like a
keeper!
![Page 58: What are the best investments if the fed raises interest rate?](https://reader031.fdocuments.us/reader031/viewer/2022011721/58760dc21a28ab306c8b4a51/html5/thumbnails/58.jpg)
Follow us @researchvaf and @researchvas on Twitter
http://nicoomer.blog.kontan.co.id
slideshare.net/valburyasia
THANK YOU