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inthemoneystock (< 20)

Is Gold The Fed's Worst Nightmare?

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September 21, 2010 – Comments (4)

The SPDR Gold Shares made a new all time high this afternoon after the Federal Reserve Bank said that they would keep the fed funds rate at zero percent. The Federal Reserve Bank also said that they would do whatever they need to in order to keep the markets higher. These comments launched the market indexes and gold sharply higher. When gold rallies it is telling the world that the central banks are diluting their currencies by printing more money. Spot gold is now flirting with the $1300.00 level. The Federal Reserve Bank no longer shares M3 money supply with the public. Therefore, the public no longer knows exactly how much money is in circulation at any one time. However, the increase in gold is a pretty good barometer of how much money is being created.

4 Comments – Post Your Own

#1) On September 21, 2010 at 4:46 PM, Dow3000 (< 20) wrote:

I would appreciate it if you stop calling the Fed a bank.  It absolutely does not engage in banking activities.  I recommend you refer to it as a criminal organization hell bent on stealing all of our money through the evil hidden tax of inflation.  I would also like to add that I do not appreciate giving money to these ass holes every day...in fact it is starting to really piss me off!

Keep up the good work, I really like your commentary.  +1

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#2) On September 21, 2010 at 4:48 PM, cbwang888 (25.56) wrote:

What if Fed has very little gold left in their vaults? And all those MBS and T-bonds they bought at higher price ...

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#3) On September 21, 2010 at 5:27 PM, chk999 (99.97) wrote:

I don't think the Fed cares about gold at all. There isn't very much in the world compared to the money supply. The Fed doesn't have gold reserves. (The gold at 33 Liberty st. is just being warehoused.) The Fed worrying about gold is like McDonald's worrying about some small family diner.

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#4) On September 21, 2010 at 5:41 PM, umps15 (39.04) wrote:

Hmm... but if people start believing that rising gold price is somehow a negative barometer on the US economic health (which I think many people do these days)...wouldn't the feds want lower golder prices?

 I mean yea.. the gold supply is tiny compared to the money supply .. but I wonder if they (or any other governments) would ever go far as to dump their reserves back onto the market to artificially lower the price of gold? 

Just something i've been pondering.  

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