On the heels of the Fed launching a massive initiative to backstop the financial system, we are now in QE infinity. The price of gold soared more than $60 and the stock market is rallying off its lows in reaction to the Fed’s announcement. Also, a note from legend Pierre Lassonde.
Fed Launches Massive Initiative To Backstop The Financial System
March 23 (King World News) – Steen Jakobson, Chief Investment Office at Saxo Bank: The Fed just made one of its most important moves in responding to the fallout from the Covid19 crisis by announcing what amounts to a backstop of the US financial system, with new purchases aimed at addressing the massive credit crunch in particular…
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The US Federal Reserve just announced a massive new programme to backstop the US financial system, by far the most important move yet by the Fed to bring relief. The important thing here is that the Fed is ensuring that the marginal cost of capital is anchored after the recent explosion in credit spreads – hence the focus on credit-impacted instruments in its new menu of asset purchases.
This is the first step in controlling yields all along the US treasury yield curve – full yield-curve-control is likely forthcoming. US equity futures and long treasuries were heavily bid in immediate reaction to the initiative.
The new FOMC statement.
Details of the new plan, which includes unlimited QE, purchase of commercial MBS, corporate debt and more.
We Are Now In QE Infinity
Peter Boockvar: The Fed is on the tape further expanding their facilities.
1) They are taking off the size limit on the amount of Treasuries and MBS they are buying. We are now in QE infinity, again.
2) They will start buy CMBS (commercial mortgage backed securities).
3) They will soon unveil a direct business (main street they call it) lending program “to support lending to eligible small and medium sized businesses, complementing efforts” by the SBA.
4) They are setting up a Term Asset Backed Securities loan facility (TALF) for asset backed securities.
5) They will expand the types of short term securities that they will back to further ease money market liquidity.
6) They are initiating liquidity facilities to ease the crunch of corporate bonds.
They summed up the moves by saying they will help “the flow of credit to employers, consumers and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing.”
Record High Gold Prices Are Coming
Billionaire Pierre Lassonde sent this communication to KWN over the weekend, prior to the Fed’s announcement…and it was right on the money: “I saw Dalio saying that the economic cost of the virus could run to $4 Trillion or 25% of the USA budget! That’s stupendous. Imagine the money printing that will go on? I am 100% certain that we will see record gold prices in the coming few years.”
BREAKING: Swiss Refiners Halt Gold Production
***Also Released: BREAKING: Egon von Greyerz Just Warned Swiss Refiners Have Halted Gold Production CLICK HERE.
***To listen to Dr. Stephen Leeb discuss the Coronavirus panic in global markets, helicopter money about to be dropped, why gold is headed way beyond the 2011 all-time high and much more CLICK HERE OR ON THE IMAGE BELOW.
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