Today gold & silver continue their bull runs with no signs of slowing. Wall Street hurtles toward 13,000 (DOW) & 3,000 (NASDAQ); meanwhile, the Fed is providing fuel by ignoring inflation & debasing the Dollar. Indications are mixed if Bernanke will sing the same song with a third verse of Quantitative Easing. All of this is keeping the fundamentals of the metals markets at a status quo.
The minimum length of time for continuing track the Fed is on is a minimum of three more months. I don’t know exactly how long it will be before a tightening process begins. It’s going to depend, obviously, on the outlook. … Extended period suggests that there would be a couple of meetings probably before action, Bernanke commented in yesterdays press conference.
While Bernanke mentioned inflation a number of times he considers it to be transitory, Although the recent surge in commodity prices led to pick up somewhat in the long-term, the committee predicts inflation will return to consistent levels in the medium term, Bernanke said. Consequently, the short-term increase in inflation has not prompted the (FOMC) to tighten policy at this juncture.
Unfortunately, the average Joe on the Street has to eat and drive to work on a daily basis making this short-term inflation a very real issue. This has been seen recently in consumer purchases declining over the last quarter. This is a real crisis of the working poor & middle class forcing them to choose between the basics like food & gas or an iPad & travel.
Bernanke finally admitted there may actually be real inflation, maybe? Ultimately if inflation persists or if inflation expectations begin to move, there’s no substitute for action, Bernanke said. We would have to respond. Let us hope the Fed responds before we see another even Greater Recession.