Fed Chairman Bernanke practically stood up and waved a green flag for the markets and the everything up vs. the greenback trade. A look at today's gold chart or virtually any other instrument priced in dollars shows us what we should think of Helicopter Ben's performance at the press conference today.
Chart: Spot Gold (substiciute with ANYTHING/USD for similar results)
Spot gold prices rose as much as 10 dollars above the recent record in today's trade after today's FOMC statement completely conformed with dovish consensus and after Bernanke's "press conference" failed to generate any tough questions or interesting answers. It was an almost surreal sight to watch the Fed chairman pontificate on Fed policies eventually creating a strong USD and the lack of any threat from "transitory" inflation while virtually all global market participants ran screaming for the USD exit on the chairman's complete lack of credibility. It was almost funny, if it wasn't also very scary. This is the most powerful position in the world, let us not forget.
The next bend in the road is the actual end of QE2 at the end of June and what kind of hiccup it might cause in the ever upward spiral for virtually everything. When QE2 ends, it does represent a factual tightening, even if the markets will still have to fret the part of the FOMC statement that reads "The Committee will regularly view the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability." If US consumers are paying five dollars per gallon of gas by then, will politicians finally wake up and smell the coffee of opportunity? So far, mainstream US politicians appear worse than clueless. In the meantime, the odds for Ron Paul's and every other libertarian's success are rising with every word out of Bernanke's mouth.
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