This May Create A Cascading Collapse & Crisis

"...If the decision to do some form of tapering is announced, it must accompany new programs and policies to manage the resultant rise in interest rates.  If rates rise in an uncontrolled fashion, it could very well have a catastrophic effect on the equity markets.  You can see that there is a tremendous gap between the current level of $178 and support back at $107, a potential decline of some 40%.  The same potential damage exists for the bond and housing markets.  What makes the pending announcement “perilous” is not the announcement per se.  It will be the accompanying new initiatives designed to mitigate the effects of pulling back on the purchases.

The policies of the Fed and the government have created an environment where corporate profit margins, stock buy backs, and margin debt are at nosebleed levels, and the belief that equities are the only asset class in which to invest.  If and when there is tapering and rates rise gradually, it would not dictate that equity prices would collapse, but a very tricky and delicate balancing act is required by the central planners.  A significant change in any of these factors could lead to a cascading decline in equity valuations.

The metals and miners continue to be subject to periodic attacks by the central planners, but the effects seem to be diminishing.  As above ground gold stocks continue to disappear and demand by Asia remains at extremely high levels for physical metals and mining properties, it feels as if the reversal which we have all been expecting might be at hand.  Investors should continue to take advantage of any short-term declines in both areas just like the major international players such as Chinese and the Indians."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/15_This_May_Create_A_Cascading_Collapse_%26_Crisis.html