I wasn’t planning to write this morning; as I’m in Denver Airport, en route to Las Vegas for the International Living conference. However, when I awoke to this unusual PM action at the 7:00 AM EST open of the New York “pre-market” session – in which gold and silver are either smashed or “walked down” 95% of the time – I figured I’d pen a few words. Well guess what, they’ve finally figured it out; and now cover it “whole hog”…
Dow futures are down modestly, and the day’s news is as horrible as always. This hasn’t stopped the PPT in recent years; but in the world of REALITY, plummeting Italian GDP, soaring Japanese inflation (way to go, Abenomics!), and the potential for a Greek military coup represent the “perfect storm” of fundamental factors for gold and silver. Throw in yesterday afternoon’s Kansas City Manufacturing Index reading – confirming the equally miserable Richmond Manufacturing Index reported in the morning – and the ingredients for “QE to Infinity” could not be more potent. In other words, “TAPER…REALLY?”
However, amidst yesterday’s comical Cartel shenanigans, what struck me most was the incredible statements of Minneapolis Fed President Narayana Kocherlakota. This clown is so dovish, he believes the Fed should print until the unemployment rate is below 5.5% (compared to the official 6.5% target) – even if inflation exceeds the Fed’s 2.0% target! Worse yet, he even used Draghi’s “whatever it takes” war cry regarding how much QE the Fed should execute to support the economy; going so far as saying QE should be increased even if the CPI exceeds 2%. These are unabashed HYPERINFLATIONARY statements that reflect the view of not one, but many Fed governors – including Janet Yellen, who is most likely to be named Chairman!
The fact remains that the Fed is clueless as to the damage it has created with easy monetary policy – and helpless to change it due to the near-term political and economic ramifications. There is literally NOTHING they won’t do to foster inflation – Japan-style; and if you bet otherwise, you WILL lose the purchasing power of your life’s savings.