Author: John King, Quacera
Covestor model: QPM Radar
The Dow Jones Industrial Average (INDU) began the month at 13,213.63 and ended it down 820 points or more than 6%. Our Early Warning report of April 18 gave us ample time to position ourselves for the downturn and as a result we have skipped past the sell-off and have been fortunate enough to add several percent to our clients’ portfolio values in May.
The “Benopause” as we call it, has confirmed once again that the U.S Federal Reserve (and the Treasury Dept.) is a long way from fixing the economic mess we’re in, just as it failed to do in the 2010 – 2011 spring-to-fall period when Fed Chairman Ben Bernanke stopped printing to see if his pump is in fact primed.
This also gives the lie to his boasts that he is 100% certain that he can extricate us from the mountain of paper he’s buried us under. Not only will he need to resume operations at the printers again late this year, every indication is that he will have to wait until after the election so as not to be seen as political. Proof once more of the fallacy and self-made traps that central bankers have been succumbing to since Keynesian counterfeiting became all the rage in the 1930s.
