{"id":27661,"date":"2017-11-06T11:17:32","date_gmt":"2017-11-06T16:17:32","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27661"},"modified":"2017-11-06T11:17:32","modified_gmt":"2017-11-06T16:17:32","slug":"the-federal-reserve-has-just-given-financial-markets-the-greatest-sell-signal-in-modern-american-history","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27661","title":{"rendered":"The Federal Reserve Has Just Given Financial Markets The Greatest Sell Signal In Modern American History"},"content":{"rendered":"
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The Federal Reserve Has Just Given Financial Markets The Greatest Sell Signal In Modern American History<\/span><\/a><\/h3>\n<\/div>\n
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\"\"<\/a>Why have stock prices risen so dramatically since the last financial crisis?\u00a0 There are certainly many factors involved, but the primary one is the fact that the Federal Reserve has been creating trillions of dollars out of thin air and has been injecting all of that hot money into the financial markets.\u00a0 But now the Federal Reserve is starting to reverse course, and this has got to be the greatest sell signal for financial markets in modern American history.\u00a0 Without the artificial support of the Federal Reserve and other global central banks, there is no possible way that the massively inflated asset prices that we are witnessing right now can continue.<\/p>\n

The chart below comes from Sven Henrich<\/a>, and it does a great job of demonstrating the relationship between the Fed\u2019s quantitative easing program and the rise in stock prices.\u00a0 During the last financial crisis the Fed began to dramatically increase the size of our money supply, and they kept on doing it all the way through the end of October 2017\u2026<\/p>\n

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Unfortunately for stock traders, the Federal Reserve has now decided to change course, and that means that the process that has created these ridiculous stock prices is beginning to go in reverse.\u00a0 In fact, according to Wolf Richter<\/a> this reversal just started to go into motion within the past few days\u2026<\/p>\n

On October 31, $8.5 billion of Treasuries that the Fed had been holding matured. If the Fed stuck to its announcement, it would have reinvested $2.5 billion and let $6 billion (the cap for the month of October) \u201croll off.\u201d The amount of Treasuries on the balance sheet should then have decreased by $6 billion.<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve Has Just Given Financial Markets The Greatest Sell Signal In Modern American History Why have stock prices risen so dramatically since the last financial crisis?\u00a0 There are certainly many factors involved, but the primary one is the fact that the Federal Reserve has been creating trillions of dollars out of thin air […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[88,16048,16049,122,124,6069,6061,8989,312,16876,16877,7070,1529,4190,6065,4901,662,2731,14890,16878,5221,753,16051],"class_list":["post-27661","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bonds","tag-buy-stocks","tag-buying-stocks","tag-central-bank","tag-central-banks","tag-economic-collapse-blog","tag-financial","tag-financial-assets","tag-financial-crisis","tag-financial-crisis-2017","tag-financial-crisis-2018","tag-global-stock-market-crash","tag-global-stock-markets","tag-investing","tag-investors","tag-michael-snyder","tag-quantitative-easing","tag-stock-market-crash","tag-stock-market-crash-2017","tag-stock-market-crash-2018","tag-stock-prices","tag-stocks","tag-stocks-go-up-no-matter-what"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27661"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27661\/revisions"}],"predecessor-version":[{"id":27662,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27661\/revisions\/27662"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}