NO INTEREST RATE HIKE IN OCTOBER

Well the Federal Reserve had put interest rate on hold, but wording quite strongly that there could be a hike a hike further down the road.

The Federal Reserve has unwittingly painted themselves into a corner. By announcing that there will be a rate hike this year, to not do so, would put the credibility of the Federal Reserve at risk. But global economy indicators are really weak right now, any interest rake hike will push the world into recession.

We have to consider the implications of a rate hike against a backdrop of interest rates and reserve ratios cut by China, and QE in EU and Japan, which have fallen short of expectations. Against a backdrop of falling commodity prices and emerging economies currencies, and falling global trade (with reference to the Baltic Index which have fallen drastically from recent highs) and IMF's forecast of global growth to 3.1% from 3.3%.

Indeed the Federal Reserve is in a tight spot. Likelihood, to salvage whatever reputation they had left, the Federal Reserve will raise interest rate but it will be below market expectations, perhaps? This will be accompanied by a dovish outlook and suggestions that interest rates hike will pause for now.

To do otherwise, the Federal Reserve would push the world into a recession.

I would still prefer gold mining companies as a long term investment, because we could be in a period of  having too much liquidity in the market but with limited growth, and of course a potential asset bubble burst in Asia, spiraling into a debt crisis.

For short term trades, I would choose gold, looking for opportunities to short as well as long.

The above is just my opinion. You are encouraged to do your own research.