The big news as far as the markets are concerned is the Government reopening and the debt ceiling being extended. The debt ceiling technically was hit last May but no one bother to discuss that in the media. Why let a potential good crisis go to waste?
So the "debt ceiling" debate was pushed back to February 17 2014… just in time for the usual BS political campaigns to start for the 2014 Congressional elections. Honestly, if the whole situation wasn't so pathetic it'd be amusing.
The markets have largely priced in a resolution at this point which is why they're pulling back this morning. Gold and the precious metals are up significantly and the US Dollar is falling.
We're now at support on the US Dollar. Let's hope it holds.
Between this development and the nomination of Janet Yellen to Fed Chair, the monetary backdrop for the US will be more spending and more monetization. Yellen is yet another academic with no banking or business experience what-so-ever. This makes three in a row (Greenspan, Bernanke, and now Yellen). The results speak for themselves.
1) Three stock market bubbles
2) A US Dollar that has fallen 20% in value against a basket of global currencies
3) Falling real incomes
4) Higher costs of living
5) An unprecedented outsourcing of wealth from the US to OPEC, Wall Street, and China.
6) The US receiving its first credit downgrade.
And on and on.
By the way, I continue to hear how great the Fed is for stocks. However, since we were taken off the Gold standard Gold has outperformed stocks dramatically. In fact the only period in which stocks outperformed Gold as an asset class was the Tech Bubble.
Interesting considering we're repeatedly told how Gold is a terrible investment and everyone's retirement/ wealth should be allocated in stocks.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.