The Federal Reserve released their monthly statement this morning. As it was put by someone on CNBC, "this is a cut and paste Fed". The statement remains the same as it has been for sometime. In light of the pick-up in economic activity this seems overly dovish. The Fed apparently is going to wait until they absolutely KNOW that the economy is revving up before they consider tightening. This action (or lack of action) this morning was very bullish for gold and silver. The long bond was bought up for a sharp rise on the short term view that the fed will support the long bond. The dollar plummeted. It shouldn't take long for the markets to come to the conclusion that it is a losing proposition to hold long term US paper while the underlying currency is declining. And it will give increased impetus to the view that the Fed will make a mistake by letting the inflation bug out of the bag. It was this same type of Fed action that led to the big decline in the dollar a couple years ago and the big bull market in silver and gold. That may happen again.
I added to SLW today. GG is looking good. Steel still strong..... Also added to TBT, although I wouldn't recommend it to the faint of heart. And I may find myself arguing with the bond market, which is a bad thing to do from a profit point of view....
The charts:
t Look at TLT, TBT, SLW, GG, GLD, SLV, UUP,
The second TLT is what it looked like later in the day.....
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All comments are appreciated as it will give me a chance to adjust my content to any real people who may be out there. Thank you. gh