vrijdag 7 december 2012

Fed has started QE3

It seems that the Federal Reserve has finally jump-started the QE3 program.

Mortgage backed securities went up from $852 billion to $893 billion in the month of November 2012. That's a $40 billion increase, precisely right on schedule according to its press release in September 2012, where it stated to buy $40 billion in MBS's each month.
Chart 1: Federal Reserve Balance Sheet
Chart 2: S&P 500
If we put together Chart 1 and Chart 2, we can find a significant correlation.

Chart 3: Federal Reserve Balance Sheet Vs. S&P

The same can be said on gold prices Vs. Federal Reserve balance sheet (Chart 4).

Chart 4: Gold Vs. Fed Balance Sheet


You know what this means, start to buy equities and gold as the correlation between stocks/gold and the federal reserve balance sheet is a fact.

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