• 15 hours Are Cryptocurrencies Funding Terrorism?
  • 23 hours Promising Oil Companies To Watch In 2020
  • 2 days Could China's Coronavirus Outbreak Impact U.S. Stocks?
  • 2 days Tesla Stock Continues To Soar
  • 3 days What New Economic Data Reveals About Gold's Trajectory
  • 4 days The Lucrative New Tech Hijacking Your Privacy
  • 4 days The Biggest Loser In The China-U.S. Tariff Tit-For-Tat
  • 5 days Trade War Takes Its Toll On Shipping
  • 7 days Is $90 Oil Possible? An Interview With Jay Park
  • 8 days Billions Of Dollars Are Flooding Into The Flying Taxi Space
  • 8 days Is This The Most Important Energy Project Of 2020?
  • 9 days Startups Are Dying To Give You A Better Death
  • 9 days U.S. Restaurants Are Struggling With Rising Labor Costs
  • 10 days The Banking Bonanza Is Just Getting Started
  • 10 days How The Trade War Ceasefire Will Impact The Energy Industry
  • 11 days Who Is The Most Dangerous Person On The Internet?
  • 11 days SoftBank Sees First Quarterly Loss In 14 Years
  • 13 days Prepare For An Oil Glut In 2020
  • 14 days Why A Strong Yuan Is A Promising Sign For The Trade War
  • 15 days What Would You Sacrifice For A Debt-Free Life?
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

FedHeads

Over the past several years I have become accustomed to the emotional and suspect diatribes of some in the Gold Advisor Community. Filtering this white noise has done wonders to preserve capital and better helped me to understand the dynamics of the Gold market's gyrations.

I do believe many in the Advisor Community have grossly underestimated the Federal Reserve's will to preserve the status quo through it's reckless and historic endeavors.

Today was a pivotal day for the FED.

We had Chairman Greenspan bullhoring against the incoming tide:

GREENSPAN: NOT CONCERNED WITH LEVEL OF CONSUMER DEBT

GREENSPAN: NO CONCERN FOREIGN BANKS WILL DUMP DOLLARS

GREENSPAN: NOT WORRIED ABOUT U.S. HOUSING MARKET BUBBLE

GREENSPAN: SAYS SURPRISED IF HOME PRICES RISE FURTHER

GREENSPAN: SAYS BOOM IN HOME SALES UNLIKELY TO CONTINUE

GREENSPAN: WAGES LIKELY TO "CATCH UP" TO PRODUCTIVITY

GREENSPAN: LONG-TERM FISCAL OUTLOOK 'DISTURBING'

GREENSPAN: HIGHER TAX REVENUES WILL CAP 2004 DEFICIT

GREENSPAN: ENERGY PRICES NOT FACTOR IN FED POLICY YET

GREENSPAN: HIGH ENERGY PRICES COULD BECOME A PROBLEM

GREENSPAN: CAUTIONS THAT FORECASTS ARE OFTEN MISTAKEN

GREENSPAN: BENIGN INFLATION IS 'GENERAL VIEW' OF FED

GREENSPAN: FED BELIEVES INFLATION IS NOT A PROBLEM

Then, we were served up the Tsunami:

Greenspan: U.S. ECONOMIC RECOVERY NOT SHORT-LIVED

Followed by this Gem:

Greenspan: REPEATS THAT FED MAY HAVE TO BE MORE AGGRESSIVE

My take on this outpouring of missives is simply this:

Chairman Greenspan is deeply concerned about all of the above. And for all of the dismal warnings above... once again, Gold was capped for an under $6 gain.

The Carry Trade has barely begun to unwind and those very large players are growing increasingly concerned about escape. This is precisely why we are seeing the rampant and uncontrolled expansion of OTC Derivatives. No door is too wide and there is clearly not enough room for escape. This has truly become and all or nothing game.

Gold, in light of the above, is underperforming.

I do firmly believe these reckless speculators will make every conceivable attempt at forestalling alternate & honest alternatives. This will fail in short order as I suspect we will see and elephant or two attempt to leave the herd and rush the exit. This will unmask the Fed's only real alternative... Hyperinflation, the likes of which we have yet to see.

When this begins, we will see gold break free of it's paper shackles.

Between now and then, I believe we will see Gold Equities come under pressure as the Dollar and Yields begin to rise concurrently. The trade will then reverse in short order as the Fed begins and "All Out" campaign of rampant expansion of bank credits, monetization and aggregate expansion through intervention.

In the end, it will end badly.

When, I believe sometime in late 2005.

After 2005 Gold will begin to ascend to it's proper monetary role.

Simply put, this is one "honest money" advisor's opinion.

Back to homepage

Leave a comment

Leave a comment