Commodity Trade Mantra

All posts under ‘US Federal Reserve’

Fed Minutes on Inflation, Debt Limit, Balance Sheet & the Effect on Gold

If the Fed minutes indicate that more Fed policymakers see the weak inflation as long-lasting, it could reduce the chances of an anticipated hike, thus the USD would drop. On the other hand, the corrective move in the US Dollar would gather pace if the policymakers blame low inflation on transitory factors. The Fed minutes due today would shed light on the future movements in gold.

Yellen Succeeds in bringing Asset Price Inflation - Result of this Success to be Feared

Yellen, like notorious previous Fed chiefs including Strong, Martin & Greenspan, can now claim success in having prolonged & strengthened an asset price inflation which otherwise may well have been about to enter its severe end phase. If history is any guide, the result of that success is to be feared. Asset price inflation goes through a mid-late phase where speculative temperatures move sharply.

Gold Prices To Move Higher Even If & When The Fed Hikes Rates

It’s very interesting to see gold prices going up despite a challenging environment of higher rates & a manipulated paper market. That tells me that there’s more to the story, that there’s more going on behind the scenes that’s driving the gold price higher. I’m very impressed with the present gold action & here’s why I expect gold prices to really take off going forward.

7 Federal Reserve Tools and Why They’re All Flawed

Here is a survey of seven Federal Reserve tools in the Fed toolkit to stimulate the economy if recession or deflation gains the upper hand and why their toolkit is flawed. Their toolkit consisting of interest rate hikes to fight inflation, and a litany of tools to fight deflation, shows that the Fed will be fully engaged in manipulating the U.S. economy for an indefinite period of time.

"Too Many Promises That Can't be Kept" - The Fed Can't Raise Rates: Paul Volcker

One can’t really blame the government for continuing its debt-funded spending spree – despite protests to the contrary – after all rates are so low, it would be irrational not to take advantage and add on more debt. However, it is here that the punchline from the Volcker op-ed kicks in, and explains why the Fed is stuck and will find it next to impossible to hike rates.

Finally The Fed Admits It Has No Clue on Inflation & Investment Spending

The most interesting comment by Fed Chair Janet Yellen was her admission that she and her prestigious voting members don’t have a clue why inflation and capital investment spending have not returned to loftier levels. Then how do they yet expect a significant 250 basis point credit tightening over the next couple of years in an economy muddling along just above “stall” speed?

The Fed’s Missed Window To Hike Rates & Failed Realizations

What is clear is the Federal Reserve should have chosen to increase rates long ago where such tightening of monetary policy would have been somewhat offset by the continued floods of interventions. The window to lift interest rates appears to have closed which could potentially be a policy nightmare. Eventually something has to give & it will likely not be the outcome the Fed hopes for.

If the Fed does What it Wants to, the Result will be the Opposite of What it Wants

The US economy is slowing perceptively. What should the Fed be doing? They might want to cut interest rates. Problem. Another tool in the arsenal – cheapen the US dollar. Again there is a problem. Whether that works & what is a good idea are separate issues. Certainly a rate hike would take the stock market down 20%. It’s going to be just the opposite of what the Fed wants.

Gold and Silver: The Precious Metals Sector and the Federal Reserve

There has been no major correction in the gold and silver market all this year, which is inflated after months of rallying, and we will look at some evidence here that the correction may have considerably further to go, in points terms if not in time terms. If the dollar rallies, gold could get whacked, but would be expected to be followed by a reversal & thus present a MAJOR buying opportunity.

The Federal Reserve Came, Saw, Did Nothing – Catching On The Fed Game?

This has become modus operandi for the Federal Reserve over the last two years. As each FOMC meeting approaches, speculation about a possible rate hike ramps up and then the Janet Yellen does…nothing. The one exception was last December, and that turned out to be a complete disaster. Interestingly, the mainstream is starting to catch on to the game.

Will Fed Kill The Dollar To Save Markets - Or Sacrifice Markets To Save Dollar?

A strong dollar makes exported US military hardware too expensive for foreign purchases & a weak dollar can cause a lack of confidence in the dollar & can cause inflation because the US relies heavily on imports. If an interest rate hike causes the equity markets to crash, demand for US Treasuries will spike, thus furthering the Fed’s objectives of keeping demand high for US Treasury bonds.

Has Gold Already Priced-In a Fed Interest Rate Hike?

Gold already started correcting following the Fed’s fear-provoking announcement that it might raise rates in mid-June. The announcement lifted the US dollar 0.8% & sent gold down 2%, but the change is still within trend. Is there more downside ahead? Likely yes. Gold is seasonally weak in June. The lead-up to June 15 might be more significant than the event itself.

Gold Prices Decline as Fed Bluffs on Right Direction of the U.S. Economy

Minutes of the Fed’s April meeting released last week showed Fed officials believed the U.S. economy could be ready for another interest rate increase in June. Will the Fed actually follow through? Sometimes, the speculation alone accomplishes the purposes that Fed has in mind. For instance, the gold price against the dollar immediately suffered from rate-hike speculation.

Barking Dogs Seldom Bite: Fed Won't Hike Interest Rates - All Dips a Gift to Buy Gold

The news that the Fed hopes to raise interest rates in June & subsequent quick price drop in gold has scared a lot of people out of gold. In reality, the Fed won’t raise rates in June on at least two counts. First the stock market rally that began in Feb has already lost steam. Second, there are no signs of a sudden economic boom. The price dip is a gift for those who want to buy gold.

Fed "Policy Error" Sparks "Best Fundamentals In Years" For Gold

As US inflation begins to re-emerge & monetary policy around it continues to remain accommodative, the potential for lower real interest rates is increasing. In our view, this could create similar dynamics for the gold market as what occurred in the mid-to-late 1970s. Gold investment appears to be moving towards stronger fundamentals than we have seen over the past few years.

Steve Forbes on the Presidential Race, Fed Recklessness and Gold

In terms of gold, unless you’re a jeweler, I see it as an insurance policy. It doesn’t build new factories or things like that. What it is, is insurance that if things really go wrong you’ve got something that will balance your portfolio. Not that you’re going to make quick money on it, but it’s like an insurance policy. You hope it doesn’t have to be used, but if it does you’ve got it.

Is the Federal Reserve Finally Being Forced to Consider Main Street?

How can the Federal Reserve help Main Street? The conventional wisdom is that zero-interest rates help Main Street by lowering the cost of borrowing. Zero-interest rates incentivize speculation, not investment & have also stripped savers of billions of dollars in interest. They can lower the cost of commodities & goods by strengthening the U.S. dollar via raising rates.

Shorts Savage Gold Futures After a Hawkish Surprise by the Fed

American gold futures speculators just savaged gold again on their historically-wrong and irrational belief that Fed rate hikes will decimate gold. Last week’s surprisingly-hawkish FOMC statement unleashed furious gold futures selling, battering gold back below its new uptrend’s support line. Futures shorting soon reverses, as those positions must soon be covered.

follow us

markets snapshot


Market Quotes are powered by Investing.com

live commodity prices


Commodities are powered by Investing.com India

our latest tweets

follow us on facebook