Anybody looking for some enlightenment from Bernanke’s press conference to help make sense of today’s gold market prices got a big – though not unexpected – disappointment. Posted by James Randolph on June 23, 2011
Something has to change before the gold market takes notice.
June 23, 2011 – Anybody looking for some enlightenment from Bernanke’s press conference to help make sense of today’s gold market prices got a big – though not unexpected – disappointment. I dared hope only for a hint that the Fed was entertaining even the remotest possibility of changing course, but that hope too was lost.
The Fed did acknowledge that growth has been slower than anticipated, unemployment has not improved as planned, and core inflation has risen more than predicted. Yet according to the FOMC news release, “economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run” somehow calls for more of the same.
The FOMC “decided today to keep the target range for the federal funds rate at 0 to 1/4 percent … for an extended period,” resolutely staying the course in the face of growing global protest. Why? “A slew of discouraging economic data convinced many officials they need to stay on hold as they assess whether the bumps to growth and inflation seen in recent months are transitory,” says the Wall Street Journal.
The last thing America needs to do right now is stand still. Well, not the absolute last thing. Should the geniuses at the Fed suddenly have an epiphany and realize the conditions that have had a stranglehold on the economy for the past three years are not transitory, they might well decide it’s time for QE3.
It looked to me like Bernanke went out of his way to neither suggest or dismiss the possibility of firing up the presses one more time. While it is absolutely maddening that he has learned nothing from his failed experiment, it is not difficult to understand. By Bernanke’s own words, it’s all a little mysterious to him.
“We don’t have a precise read on why this slower pace of growth is persisting,” Bernanke tells us. Things “like weakness in the financial sector, problems in the housing sector, balance sheet and deleveraging issues … may be strong or more persistent than we had thought.”
The real issue is not Bernanke’s ineptitude, however, it is our tolerance of an out of control central bank. The Fed has seized far too much power and has mushroomed its mission light years beyond its charter. Until it is reined in – or abolished altogether as Rep. Pawlenty proposes – there is little hope of economic recovery.
Nothing changes when nothing is changed. Perhaps that explains why the gold market seems more interested in Greece than it is with the deterioration of the greatest economy on Earth.
Senior Staff Writer – Certified Gold Exchange