Precious metal expert Michael Ballanger breaks down the gold price roller coaster surrounding the Fed’s decision not to raise interest rates.
Janet Yellen just blew all remaining semblances of credibility believed to be still present at the U.S. Federal Reserve Board.
We have all heard for the past month or so that the Fed was going to hike the Fed Funds rate at today’s meeting, the anticipation of which caused a rally in the U.S. Dollar (USD) and a surge in stocks—all while the bond market was rallying in response to weakness in the macroeconomic environment.
Well, they didn’t raise as predicted back in March because of “China weakness,” so today they didn’t hike because of “soft exports” and “vulnerabilities in the global economy” and “Brexit worries” and a host of other totally clueless hypothecations. But the bottom line is that they didn’t hike because the ensuing dollar rally would impair the collateral that underpins the massive debts owed by governments and homeowners to the banks that hold that debt. Stocks reversed lower when it became clear that the Fed has absolutely zero control over the U.S. economy, and is now truly caught in the headlights because banks are getting killed with the yield curve this “flat,” and since the Fed’s shareholders ARE “the banks,” it takes on an aura of the surreal.
As long as I have been writing about markets (and that dates back to 1987), I have never EVER had any respect for the banking industry. To think that in Canada, when you get your paycheck and after your employer has deducted taxes and benefits from it, you cannot get paid with cash. In my first job as a golf pro shop attendant (“club cleaner”) in the 1960s, the club pro handed out little banker envelopes with cold, crisp bills …read more