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Gold and Silver Blast Higher on Bernanke Interest Rate Hold Pledge

Commodities / Gold and Silver 2012 Jan 26, 2012 - 02:38 AM GMT

By: Mike_Shedlock

Commodities

Best Financial Markets Analysis ArticleIn a press statement regarding today's FOMC meeting, the Fed announced that economic conditions would "likely warrant exceptionally low levels for the federal funds rate at least through late 2014".


If It Doesn't Work, Keep Doing It

As noted in Premature Dollar Obituaries and Mainstream Economists' Monetary Insanity; Keynes-Inspired Great Depression; Lessons Not Learned, this policy decision is highly unlikely to accomplish what Bernanke wants.

Bernanke's policy now boils down to "if it doesn't work, we'll keep doing it until it does". Those on fixed incomes have been crucified by the Fed's policies and will continue to be crucified by the Fed's policies until low interest rates work.

Reaction of Gold, Silver, $HUI to FOMC Statement

$HUI 10-Minute Chart


Gold 10-Minute Chart


Silver 10-Minute Chart



The $HUI gold miner index blasted higher on the FOMC announcement. Interestingly gold and silver blasted higher before the announcement.

Treasuries rallied as banks and brokers font-ran the trade.

This is all well and good for the 1% and for the banks that front-ran the bond trade, but it sure is not doing anything good for those on fixed income or most of the 99%.

I wrote about the plight of those on fixed income in detail, nearly one year ago in Hello Ben Bernanke, Meet "Stephanie".

Hello Stephanie, uncle Ben promises more of the same

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2012 Mike Shedlock, All Rights Reserved.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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