When Dr. Alan Greenspan became chairman of the Federal Reserve, he moved from the world of rhetorical economics to the world of action. His most recent memoir attempts to make sense of how the financial crisis of 2008 came to be and how we can better predict future crises, along with the role of gold in a global monetary system.
Oil rallied further after the leaked Fed story. Apparently the Fed did not want the market thinking that rates were going up anytime soon so they dropped a dime to their buddy Jon Hilsenrath at the Wall Street Journal.
Even after five years of the Fed’s most aggressive accommodative policy in history, there is still a lack of hoped for quality credit creation in the economy, which could be a sign that the greatest deleveraging of the U.S. economy since the Great Depression is still not complete. The Fed’s unrelenting dovish policy appears to support this concern.
Being “Cyprussed” is probably on the table if the U.S. dollar eventually collapses. So what is left for the reasonable person who has worked hard and saved a few pennies? Not much, but silver is certainly high on the list as hedge against such a scenario.
During his testimony before Congress this week, Federal Reserve Chairman Bernanke made it a priority to dampen the growing concern that the unprecedented growth of the Fed's balance sheet presents great risks to the economy.
Gold climbed $15.50 or 0.94% in New York yesterday and closed at $1,672.90/oz. Silver surged to a high of $30.926 and finished with a gain of 1.45%. The yellow metal was on track for a 1% weekly rise, after falling for five of the past six weeks.
The Federal Reserve’s new stimulus measures have had a noticeable impact on market confidence in the dollar and the solvency of our current monetary system. The Fear Index picked up in September and is once more over 3%.