Whether they will raise the debt ceiling or not is not important for the market as the Fed will engineer a market collapse in order to justify the initiation of QE3, whether or not they will call it QE3, it may come in under a different name.
It is now a political chess game between the Republican and the Democrat ahead of 2012 election, with both party looking to make a deal in order to claim victory. Regardless of what they will decide, they would want to collapse the market first, then to be followed by QE3. The US default and currency collapse is a mathematical certainty, but when it comes is very difficult to forecast because of the "herd mentality", and there is no way to predict when the "herd" decide to stampede out of the US dollar.
Until the decision on the US debt ceiling is imminent I will continue to look for the shorts to cover. Once the decision is made anything can happen as the Fed will engineer an agenda that they thing suits their goal of ushering QE3.
