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Don’t Even Wish For Better Employment Number If You Own Stocks

By Lawrence Chan   on 2013 May 9 Thu 10:07

Today the Jobless claims number fall to lowest level in 5 years.

People just started to cheers about it and keep talking that how high can the stock market goes.

Wake up. Fed will reduce QE before employment number hits its target.

It is like applying a brake – you have to do it before the stop sign not after.

So that means Fed may act on the data any time now.

Mainstream media probably would not talk about this until it is too late.

This is the dilemma Fed is facing:

Too much QE when there is sign of recovery (no matter how distorted the government data is), hyperinflation will sneak in.

Reducing QE may just drop all the markets by 10 to 15% quickly and there goes the wealth effect Fed is wishing for.

This is what happen when the recovery is fake, just like the so-called economic growth in USSR and China back in the 1960s and 1970s.

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