So much for the confidence boost by the Federal Reserve if large institutional investors would rather keep their money under the mattress.
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New York, NY (PRWEB) December 19, 2011
Following the liquidity injection by the Federal Reserve and world central bankers, the markets ended the week in positive territory. Even though the headline looks great, there are serious issues for both the stock and currency markets according to Sasha Cekerevac, contributor to Profit Confidential.
“I wouldn’t move so fast in calling an end to the volatility in the markets,” says Cekerevac.
Short-term Treasury bill yields are still negative. “What this means is that investors are literally paying their own money, so they can park it in short-term Treasuries, because they’re too scared to invest it in anything else,” writes Cekerevac in Profit Confidential.
“So much for the confidence boost by the Federal Reserve if large institutional investors would rather keep their money under the mattress,” says Cekerevac.
As reported by Cekerevac, some firms are already calculating for this possibility. A report by Nomura calculated what the individual currencies would be worth in relation to the euro if they broke apart. Only Germany would have a slight premium, but some countries like Greece and Portugal would have devaluations in excess of 50%, while most of the remaining eurozone nations would be devalued in the range of 25%-35%.
If the eurozone were to break up the euro currency, there would be a mad dash into gold and precious metals, according to Cekerevac. “If you were a citizen in the eurozone and you knew that your currency would be worth 40% less tomorrow, wouldn’t you try to protect yourself from that kind of value destruction?”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.