Another, not so good, report from Ben Bernanke & the Fed started a mini rally in gold this afternoon. The Fed is looking at the economy with a dual mandate: to foster maximum employment and price stability. It is with these in mind that they seek to cure the economic woes many of us are feeling today.
Once again Bernanke & The Fed are talking out of both sides of their collective mouths. Look at these contrary statements: The unemployment rate remains elevated; however, the Committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline… Interesting, we saw a decline in unemployment in April only to be erased by May’s employment numbers.
Then Bernanke addresses inflation: Inflation has moved up recently, but the Committee anticipates that inflation will subside to levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate. In other words, if you don’t count gas & food the remainder of the economic inflation numbers are right where we predicted. So America, stop driving & eating then the effects of inflation will be minimal.
But we can be comforted, Uncle Ben is on the job: However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations. Great to know they are getting paid to tell us what we already know from our own wallets. Jobs & prices are both in the red zone causing the average consumer to reevaluate what & how they spend.
All of this helped gold to pick up steam this afternoon. For the struggling Dollar many are turning to metals to help stave off the effects of inflation. Dennis Gartman publisher of The Gartman Letter told CNBC gold is the best long term investment, It’s still moving from the lower left to the upper right, and with the Fed likely to err on the side of easy money, expect the trend to continue. And you can expect us to continue bringing current information on the metals market guiding investors in the right direction with there Tangible Asset Portfolio.