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Over the past few weeks, all the hoopla and speculation whether Stephen Poloz Bank of Canada chairman has purposely weakened the Canadian dollar via his commentary whether or not Bank of Canada Interest Rates wil rise or fall? Can Mr. Poloz change previous monetary policies with a new path??
The answer…most definitely..we have to trace back to Stephen Poloz Bio and his employment history, 14 years with the Bank of Canada from 1981-1994 and in 1999 joining the BDC (Business Development Canada) where he became President and then CEO in 2010. Mr. Poloz has the “finger on the pulse” yet in the game of world central banks, he is just a “pawn” in scheme of a bigger picture.
The Yellenator (Janet Yellen) and the FED lead this game and whatever monetary policy is provided, the others will follow.
The U.S. FED will dictate their monetary “mantra” to others and leave an unlimited timeframe for others to follow. We have seen this pattern amongst other nations and now Canada has decided to follow the “pied piper”…whatever tune the “Yellenator” plays..the rest follow.
Canadian exporters have been begging for this recent fall for the CAD, yet previous chairman Mark Carney now chairman of Bank of England never participated. The question, is this current move more to do with dovish commentary or stronger U.S. data causing the weakness. Remember, Canada Exports by Country 85% tied with the U.S. The bigger picture, manufacturing in Canada will not claw back gains from a weaker CAD, Caterpillar, Heinz Canada have shown that to operate in Canada is costly, both organizations have brought business back to the U.S. or Mexico. Overall the U.S. cannot continue to inflate their economy to infinity. Sooner or later the game ends, the question is…which economies will remain resilient after the monetary game subsides??
As we draw closer to the date of January 31st of 2014, a saga will end and bring in a new era for world central banks to follow…the “Yellenator”!
Bernanke or in my opinion “Bernhamlet” to “taper or not that is the question” has provided the financial markets additional stimulus injection Bernanke QE3 that history will remember for decades. Bernhamlet has created a legacy for himself that exceeds all previous FED chairmen, Greenspan or Summers.
During Bernhamlet’s tenure, he has had famous battles with the infamous Ron Paul amongst other Financial Committee U.S. senators, Bernanke Speech explaining the FED monetary policy stance and why it is effective. He remained resilient and with his back against the ropes came out with the biggest knockout…Ladies and Gentlemen…”injection to infinity”. He has embedded his code to all central banks that “stimulus” is the only option and inflation will be contained. We have seen 2013 become a year of “stimulus” and as it ended the debate to dwindle down “bond purchases”. Even his famous quote “data dependant” regarding to increase or decrease stimulus has been imitated by numerous central bankers, including our very own Bank of Canada chairman, Stephen Poloz and previous chairman now Bank of England ..Mark Carney.
With the new chairman on board the Yellenator, Bernhamlet has groomed the new prodigy to enforce his mantra. Yellenator will add her own twist, yet she will remain on the similar path to assist a sinking Titanic the U.S. economy that in time will have no option but to relinquish it’s dominance as the world currency.
For now, Bernanke has created more breathtaking illusions that the great Houdini or David Copperfield would ever imagine. Truly create nothing out of nothing..increase stimulus = more paper debt placing future citizens indebted for a lifetime. Whether Bernanke has left his post, the “Wizard of OZ” will always remain behind a hidden curtain. Thank you Bernhamlet for creating the biggest “credit” creation in history.
Bullion surge or not…this enquiry has been on the minds of numerous investors and the markets in general?? When will we see the next surge for Bullion…or will the predictions via Goldman Sachs earlier this year, hold value and once again place a “dagger” in the growth of recent bullish bullion trends.
The famous Dennis Gartman, Eric Sprott, David Morgan, Marc Faber & Jim Rogers strongly believe the “time is near” for bullion to make a run in the coming years. These highly acclaimed individuals have “stuck to their guns” and have not altered their mindset on what lies in the future for bullion. Yet the media has created a “masterful” job in painting a different picture. Some views are Silver Prices &Gold Prices are manipulated.
This picture even stems down to some advisors and financial planners. In their minds…”gold is a very risky asset”…truly…what is not risky today? Shares are falling and rising like a “rollercoaster”…tell that to individuals that owned Facebook…Nortel there are many that are in the red for the investor. The investor remains confident that their share price will rebound, yet investing in gold & silver remains a mystery. In my view, it is lack of education and realizing that the only preserver of wealth for centuries has always been gold & silver bullion.
The mentality for along time in North America…”buy low ..sell high”..relates to products excluding gold & silver. When your an investor and your taught this philosophy…you cannot resist to invest in securities. If every investor thought that “physical assets” such as bullion are considered risky..why do we purchase property? Simple answer …for the long term growth and reward. The difference bullion..more portable, divisible and much easier to liquidate.
Can Gold & Silver surge once again…? If you check the statistics of central bank reserves and the BRICS nations…that answer is definite “yes”. To the rest..it is a “no”..and the “short-term” view of each investor will keep the philosophy that bullion does not hold true value. Remember…..if bullion truly holds no value..the global central banks would not have this asset attributed to their reserve portfolio. It is not only a protection against inflation for these organizations, it is more a protection of their countries wealth.
The surge is coming…and when it does…make your decision..”do I want to own a physical asset” that has lasted for centuries and is divisible or do I sit back and wait for the “proof in the pudding”? Bullion whether buried in the oceans or in soil…when discovered..the “gleam” awakens every soul.
Bank of Canada possibly lowering interest rates in Canada??
This topic has been circulating amongst Canadian economists, traders and even business media analysts for over the past few years pertaining to Bank of Canada Interest Rates. Since Mark Carney (former Bank of Canada chairman…presently BOE chairman) set the path for all Central banks to follow.back in 2011. Basically he froze rates and that structure has remained for the newly appointed Stephen Poloz Bank of Canada chairman. In fact, the FED has not risen their rates and the RBA in Australia has changed their strategy to slash their interest rates.
The hype of interest rate hikes has allowed the 6 big Canadian banks to capitalize and sway Canadian homeowners on interest rates and lock in fixed rates for 3 or 5 years. Variable rates considered risky, yet now those who have variable rates will benefit further from a lowering of rates.
The real picture is that the Canadian consumer could not handle another rate hike due to over-leveraging on various debt products, credit cards, multiple loans i.e. mortages, student loan, car loans. To raise rates would be suicidal for the Canadian economy. Of course growth for an economy starts with supply and demand. Currently, the only demand we see here in Canada mainly from international investors parking their funds here as a safe haven and purchasing condominiums and newly built homes. The average Canadian willing to request a new loan from their local bank either for a small business or to purchase another home etc…has more stringent rules applied to meet the criteria.
Poloz announcement last week is nothing new to myself or others, Canada’s economy will continue to stagnate as the US is not our “saving grace” to prosperity once more. Canadian companies are sitting on hoards of cash reserves and until “uncertainty” in the market plagues investors, Canada will remain in a “turtle paced” economy.
If BOC possibly lowers Interest Rates, Poloz should make the decision prior to the first quarter of 2014, as it will allow Canadians to make further payments on their existing loans and breathe easier. Maybe if your lucky Mr. Poloz the average Canadian might have less debt and pay back their loans..wouldn’t that be the ideal situation for Canada??
Canadian companies spending for 2014 …as projected US economy growth will provide optimism. Have we heard this before?? In 2011, 2012 & 2013 similar projections of the US growing and recovery is near??
Private Canadian companies have hoards of stashed capital (5.7 trillion statistic via CIBC), yet uncertainty plagues their decisions and we currently see in Canada…growing workforce in “part-time”. Net employment change data announced every month reveals similar labour results to our neighbouring nation the US. Less full-time work created, more part-time and a revelation increasing “startup” ventures.
If we are to see Canadian companies opening their pocket books, this will happen solely because our international trade i.e. Europe, Asian, Latin & South American deals are starting to bring the “fruits of prosperity”. Presently, 80% of trade internationally is solely with the US.
Europe, Asia, Latin & South America contribute to a very small amount. Since 2008, our Canadian economic policy should have changed and diversified our trading portfolio…less dependant on US …more on other nations. As a nation, our strategy is late in the game and to see progression trade deals usually benefit within 5 -10 years. Can the Canadian economy sustain stagnation as we currently see and be patient for our neighbouring US to rebound? The US is creating a “black hole” for it’s current debt, US debt limit increased yet more to come in Feb 2014?? Optimism by other nations in the world ..mainly BRICS nations are losing confidence in the US monetary policy. Newly appointed FED chairman “Yellenator” is “status quo” for US. Nothing will change, “digital printing” press will continue…long term US currency heading for disaster.
Canadian companies have an opportunity to take the lead, be innovative and be the leader instead of the follower..as we have for so many years. I have always stated, in order for the Canadian economy to grow…it is not our government’s responsibility to inject growth. It is our entrepreneurial private companies to “charge ahead” and invest, purchase international companies to assist in their growth and evolve. Evolution is part of humanity and part of our thinking process…where are we Canadian companies in this stage of the game???
The clock kept on ticking…and the US debt limit extension was near or was it not?? The media continued to add excitement, drama, frenzy and of course the possibility of “what if” a U.S. Government Default or U.S.Default 2013??? Has the US default averted or postponed for another day?? Hollywood truly needs to add a nomination in 2014 during the Oscars for “best drama”..and the winner goes to…..US senate …”best supporting actor” US media.
This illusion that we continually see on mainstream media starts to get stale, GM bailout 2008 the list goes on. The real story behind these issues…U.S. senate loves to additional clauses in each passed bill. The bigger picture, the average U.S. citizen will shed the pain as we have seen currently with social services, food stamps etc. The apparent “averted default” will arise again in February 2014 where apparently the U.S. Debt limit expires once more.
Meaning of Averted : to ward off; prevent. Do we agree this has been averted..for now yes..but for a bigger mess later…? No matter how the “cookie crumbles” the U.S. economy is becoming scrutinized more than it has in history, as most empires experience during times of hardship. Every empire provides the same plan…weakened economy, appeal to the masses and bring on the games or distract from the real issues. The media has done a masterful job of that!
Did you think Tyson vs Holyfield match was a good rematch…how about his next round in 2014?? The overall picture for the United States of America will be …how long can this illusion continue and will the world economies plan to place the USD on the shelf and place another few basket of currencies as the mainly denominated reserve currency. With 2014 around the corner, US default averted or will continue… the financial world is evolving with mobile payments, bitcoin, Mint Chip..what is next for our monetary system??
Yellen is back! Or should I say “Yellenator” is baaaaaaaaaaaaaaacccckkkk!!
The chatter continued through the summer…”Summers or Yellen“?? Back and forth like a tennis match. Yet Summers bowed out and gave the new queen of “injection” Yellen the official role. Janet Yellen Bio is impressive and will become the first female to lead the Federal Reserve Board. Although the markets tried to create new candidates…even the infamous “Geithner increase your cap limit ECB” was mentioned? Could we imagine that?
Yellenator was the only choice…she consults with Bernhamlet on his FOMC meeting minutes & FOMC Statement….how could she not be the chosen one? She is the “status quo” for Wall ST…the “fat cats” will continue to see the equity markets inflate as all “hail rise to Yellenator”.
Bullion markets have loved Bernhamlet ..can the Yellenator provide the same boost?? Yellen will be challenged yet she will keep the “ship afloat” for how long? While the US continues to play their “Hollywood epic” to the world, the world is looking to other alternatives and will the USD be tagged with an SDR? Overall, markets are pro “stimulus” regardless of “taper” talks…there will be no “Octaper” ..”Decaper” or even “Janaper.
If we do see tapering…expect the return of huge stimulus in the future. The US cannot operate their military machine nor pay their bills and risk default, US debt limit will increase and all will remain “status quo”. As well the Federal Reserve Balance Sheet needs to continue to increase their bond purchases. Who else will buy these “toxic assets” leftover from 2008. How will this play out….2014 or maybe 2015 alot of changes expected for our world financial system.
TIC..TOC..TIC..TOC…the clock strikes midnight..and will the US shutdownallow a partial or full shutdown today????
Since 2005, the US has provided numerous “Hollywood” events…Iraq war invasion, Obama Bank Bailout 2009, GM Bailout 2009 (although GM Bailout Pay Back 2012 cleared debt), Us Debt Ceiling increase, “to taper or not” via Bernhamlet…and now…a possible US shutdown looming..the first in 17 years?? Can we believe this scenario?? How many more epic issues can the “magicians in the U.S.” provide to the world?? Hasn’t the “rabbit” out of the hat trick been shown??
The world has changed allover from a financial perspective and if your seeking a “main event” of all nations in the world the US provides “Superbowl” style hype like no other…grab some popcorn and refreshments and enjoy the show!!
Let’s be honest, Obama under his current term will continually provide these “illusions”, Bernhamlet will continue his “rabbit out the hat tricks” as both need to maintain “status quo”…all is good in their minds. We all know the US is heading towards a downward trend with a memorable U.S. Debt History …and continual devaluation of the USD does not benefit the world economies. The digital printing press via the FED is the only resolve for the US as they need “easy money” to feed their Bank Bailout List and cushion Wall St “fat cat” bonuses. The financial world is slowly trying to evolve into a new standard and will the BRICS nations banking system that is currently developed..become the a model to follow for the future??
US Debt ceiling looming in the next couple of days…..
U.S. Congress will be debating on September 30th 2013, to pass a federal budget pertaining to U.S. Debt 2013 and increasing the “US debt ceiling limit”. This scenario reminds me of U.S. Treasury Secretary Timothy Geithner plea to the senate back in January 2013 and to increase the “debt limit” …otherwise military salaries will be affected, Social Security payments etc.
Once again another Us Debt Crisis scenario is lurking behind the scenes…as the drama unfolds, similar to the FED debate to “taper or not” via the infamous “Bernhamlet”. The hype was building for months and what we found out, no tapering..for now??? This issue is identical, the US Federal Reserve Bank will not allow U.S. Congress to halt the “digital printing” press…as the U.S. economy cannot survive without the continual stimulus flow. Geithner, Bernhamlet, Yellen…the “song remains the same” as the famous line from Led Zeppelin. Status quo is here to stay and expect no change coming up this week.
Overall, if we assess the overall U.S. economy and the use of stimulus, by adding more to their debt has not changed U.S. government or administration policy. In fact, since 2008, the Big banks, Wall St have not changed their business model…if the Fed is not willing to change their monetary policy of continual injection…why would the world expect anything new from the U.S. Congress??
Regardless of how Moody’s rates the outcome…the bigger concern for the U.S. administration is how will the BRIC nations react? Currency wars are amongst us as Jim Rickards (author of the National bestseller “Currency Wars”) and how will those nations respond to this current U.S. issue?
Famous quote we are hearing today in the financial markets…”to taper or not…that is the question?”
Bernhamlet (as we all know him Bernanke) has managed to provide the most elusive hype of the current century. Over the past 3 mths ...Bernhamlet has continued to keep the media, traders and analysts guessing as to the Fed’s true plan. Either to end bond purchases and clear Federal Reserve Balance Sheet, slice alittle or continue to “print to infinity”. Yesterday’s Bernanke Speech via his Bernanke Press Conference in Washington, was not a shock for myself or others in the market..yet the media had seemed surprised. No TAPER…what??? After years of assessing technical and more so “macroeconomic” data…the Fed will continue provide these “menagerie tricks” as the U.S. economy cannot survive without continue more stimulus.
I read an article yesterday from the Telegraph in the U.K…and the editor had mentioned a valid point. Stimulus can be a positive factor for any economy…the key is to direct it where it is needed most. In the U.S. we have seen…the path of Unconditioned Stimulus into the “big banks” pockets or right into Wall St.
Can the Fed continue this hype as “chatter” continues today…will “Octaper” commence for next month? If Yellen is nominated or whomever the next candidate to replace Bernanke…will they correct the U.S. monetary policy and provide hope…or continue the “petal to the metal”.
Truly, Who Owns Federal Reserve..we all know it’s a private entity…and it will remain at the “helm”. Overall, next month’s “Octaper”..if that transpires and U.S. debt limit will be heated discussion. Grab your popcorn as the end of 2013 will be the “highlight” in coming years and possibly Bernhamlet’s legacy.