Under current law, on Jan. 1, 2013, there's going to be a massive fiscal cliff of large spending cuts and tax increases," Bernanke told the House.
The trifecta of disaster; debt limit, sequestration on spending, tax cuts -- if not corrected will surely pin our economy. Bernanke is likely waiting to see commitment or no commitment from Congress before deciding on QE3.
With little time after the November 6 election, I wouldn't bet on Congress getting anything passed before January, 1st 2013 Fiscal Cliff deadline. Without Congress Bernanke must fight alone.
November-December Congressional Calendar
Upcoming Federal Open Market Committee FOMC Meetings
July 31-August 1 (Tuesday-Wednesday)
September 12-13 (Wednesday-Thursday)*
October 23-24 (Tuesday-Wednesday)
December 11-12 (Tuesday-Wednesday)*
Bernanke schedule should be taped to your fridge. FOMC meetings have always been very important for market timers. Most market moves take place shortly before or after FOMC meetings. Bernanke will likely use one of these meetings to announce QE3. Markets will gather more volatility as each date is passed by with no formal QE3 announcement.
Your best bet is to sit tight. Wait and see if the FOMC September 12-13 meeting passes with no QE.
No QE3 in September, and a dangerous approaching Fiscal Cliff makes for a great opportunity to make money.
Investors have many options to explore before markets quickly head south.
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