When the gold market’s bull run will begin to wind down. Posted by James Randolph on August 26, 2011
When the gold market’s bull run will begin to wind down.
August 26, 2011 – Why anybody actually expected that anything momentous would come out of Jackson Hole is beyond me, but as predicted the gold market has been running amok all morning. Yet the only vital message continues to go unspoken.
The Fed has failed and the reason is clear: you cannot micromanage an economy. That wasn’t intended to be the Fed’s job. The Fed is a bank and its mandate was only to protect the currency. It is not, and never has been, within the power of a central bank to create jobs – that’s the sort of stuff governments are supposed to handle. And the Fed has no duty – no, it has no right – to interfere in the markets.
But that didn’t prevent the Federal Reserve from embarking on a century of power grabbing, embedding itself ever deeper into the economy like an insatiable genetically altered tick. But still, in the wake of all the devastation the Fed has wrought, we keep turning to it for answers. How much more will it take to convince Americans that the Fed is not the cure, it is the disease?
Bernanke told us that he and his band of rogue scholars can’t do much about the long run. That may be true today, but only because the long-term effects from its past excesses have piled up so deeply that there is no longer any way out. So Bernanke tossed the hot potato to Congress.
That would have been a great idea 20-30 years ago, while there may have been some hope of averting catastrophe. Today all it can do is knot Washington even tighter. Bernanke cannot extricate himself from politics even if he wanted to. And the big money that is running the government isn’t about to let him off the hook.
All those decades of self-seeking policy have pinned the economy in a corner. And it is best to leave a cornered beast alone. There is only one rational path remaining for us to take – stand down and let the markets find the way out. The markets will be strict, even severe, but they won’t be cruel. They need us.
When the Devil scoots by on a snowmobile you will know that we have at last taken that path, and that better times are indeed not so far down the road. And at long last the gold market’s bull run will begin to wind down.
Senior Staff Writer – Certified Gold Exchange