Today one of the greats in the business discusses the Fed and the real reason why gold and silver have been on a tear.
A Trapped Fed
January 7 (King World News) – Here is a portion of what Peter Boockvar wrote today as the world awaits the next round of monetary madness: So we now have a ‘flexible’ Fed, both on rates and the balance sheet. Keep in mind though that there is a difference between someone who wants to be flexible because they’ve achieved their objective and one who is flexible because they are being forced to be…
To listen to Doug Casey’s just-released KWN interview discussing his prediction of financial and economic chaos and a panic into gold CLICK HERE OR BELOW:
As the Fed’s goal remains a 3%+ fed funds rate and a much smaller balance sheet than it is now (it’s only down by 11% from its peak size), the latter certainly applies here for the Fed. Thus, notwithstanding Friday’s great jobs report, the economic data better not weaken from here in 2019 with the ISM and other data points leaning that way because of the obvious limits that are available to the Fed in terms of space to ease.
In the meantime, while rates are on hold for a while most likely, the balance sheet run off is certainly the focus but one that is much harder to quantify with respect to its impact to the economy, as opposed to the markets which I believe is more obvious. That said, for markets in the short term, it’s all about earnings over the next month.
Gold & Silver Surging
On this new found ‘flexible’ Fed, the euro heavy dollar index is at the lowest level since late October on a closing basis. The Bloomberg JPMorgan Asian currency index is at the best level vs the US dollar since late August. Both gold and silver are higher in response with the latter at a 6 month high and the former just below a 7 month high.
KWN has now released the outstanding audio interview with Bill Fleckenstein discussing what he believes is in store for the stock market, gold, silver, bonds, China, and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
ALSO RELEASED: Greyerz – Gold, The Coming Great Depression & Panic, And The Most Important Gift CLICK HERE TO READ.
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