Bernanke saves mid-term PM market

[TomD]

Anyone paying attention to the metals and financial markets during the previous decade would have been hard pressed to not notice the inverse relationship between PM prices and Fed interest rates. Just like clockwork there would be an immediate jump in PM price in response to a rate drop and the opposite in response to an increase. I've been keeping a very careful eye on interest rates not only because of my metals but also because I've got some serious money (to me) in treasuries, having a big rate hike catch me unawares would be bad.

Well, Mr Bernanke has saved my bacon, today announcing that rates would stay steady and low for at least another 2 years. While that's good news for me and my investments, it sucks for the US dollar and by implication for the US economy. Sorry bout that.

[osoab]

Sure, go ahead and reap rewards on the backs of your fellow Americans. ;D

[mamboni]

Anyone paying attention to the metals and financial markets during the previous decade would have been hard pressed to not notice the inverse relationship between PM prices and Fed interest rates. Just like clockwork there would be an immediate jump in PM price in response to a rate drop and the opposite in response to an increase. I've been keeping a very careful eye on interest rates not only because of my metals but also because I've got some serious money (to me) in treasuries, having a big rate hike catch me unawares would be bad.

Well, Mr Bernanke has saved my bacon, today announcing that rates would stay steady and low for at least another 2 years. While that's good news for me and my investments, it sucks for the US dollar and by implication for the US economy. Sorry bout that.

Bernanke said that the FED would insure virtual ZIRP for 2 years. That is de facto monetization in my mind. In the real world economy, interest rates are determined by the real world demand for dollars. ZIRP is equivalent to zero demand for dollars (infinite supply) like gravity is effectively indistinguishable from linear acceleration. Barring a dollar crisis like 1980, Bernanke has guaranteed progressive dollar devaluation and a rising gold price. Silver is more complicated because demand is partly industrial. IMHO, while demand may stagnate due to a weakening economy, the loss of confidence in the dollar worldwide will more than compensate for this as the less affluent populace that cannot afford gold demands the next best thing, monetary metal-wise, silver.

Long term: gold and silver are a buy and hold, despite the price volatility.

[ximmy]

This is status quo...The big money held by private individuals still needs to be gleaned from the ranks of the masses... and into the hands of banksters & friends