With such a short time to go, the Fed is still even considering to swallow an $800 billion in liquidity., China is drowning and many emerging markets in big trouble. Commodities still plunging and like it or not junk bounds are almost ready to implode. Yes, i worry. Sterling could get trapped in the middle with nowhere to go. That's my pension. My livelihood. Nothing seems to make much sense
Commodities are plunging because of China, they use so many raw materials and their slowdown is what is causing all the problems in mining. At the same time the Saudis are trying to kill fracking in the US even if it means making a major loss, stupid move because their oil reserves are probably nowhere near as large as reported so they don't have that many years profit available to them once prices oil climb back up. The cut in oil investment feeds back into commodities as manufacturing is cut back due to postponed or cancelled oil projects. China's problems are self inflicted as they kept up a financial lending boom when the rest of the world collapsed in 2008, so they now have some huge bubbles about to burst and that will feed back round all over again into all the other investment decisions worldwide. That 800 billion was that not in 2008? Surely the US has gone way past that in terms of pumping liquidity into their economy? If the Fed raises rates money will pour into the dollar, the pound will slide a bit but probably be offset against falls in emerging economies, I am still surprised that the pound has held up so well this year against the Peso. If you still have uncrystallised pensions or pensions that are in a drawdown plan then yes these market gyrations can be scary. A lot of the dynamics of what is going on will be the results of the bets the markets have already made starting to unwind and the making of new bets pretty much what happens all day everyday, lets just hope we don't see another full crash.
Well it's not long now before we'll be better able to understand the possibilities. Personally I'm in that camp that says wait until the global risks are better balanced. But I think the Fed is under pressure to act. It seems to have put itself between a rock and a hard place and may be forced to hike.
