After two long days of nut scratching the Federal Reserve offered up its statement yesterday afternoon, and true to the form of the last few years it was once again laced with contradictions and ambiguity. I won’t get into the nuts and bolts of it because it is not worthy of a detailed deconstruct, but here is the bit that gets my goat the most.
The Fed said they see an improvement in the economy (that is welcome and good news, if you believe them). They then went on to say that they are going to keep interest rates low for an extended period of time. So what is it? If we are improving let’s raise rates to head off inflation, or is the economy still circling the bowl as implied by the second sentence?
As if that wasn’t confusing enough mix in the Treasury saying they are in favor of a strong dollar, as they willfully stand by as it takes a swan dive like a Mexican cliff diver, and anyone on the outside looking in would wonder what the hell is going on here.
At times like this I turn to the price of Gold, as I like to think of it as the ‘Barometer of Truth’. Because being an inanimate object (it’s literally a rock!) it cannot lie or cheat us. I like to think the value of Gold is unchanged and all other goods, services and currencies are the ones whose value oscillates. So let’s check the barometer shall we? Oh look it’s at an all time high closing at $1092 last night. That means we can throw the ’strong dollar’ baloney out the window, and anyone who thinks a weakening dollar policy is an easy pain-free way out of the credit crisis let me tell you it is your purchasing power that is getting eroded, therefore it is you that is paying the tab. A rising Gold price is also indicative of inflation, and if that is truly upon us in tandem with anemic economic growth, the good people at the Federal Reserve will have to have a few more bunny rabbits left to pull out of their figurative hat.
Sorry for the rant, but the inconsistencies from our financial leaders is starting to wear on me…
Oh and one last thing, I know the image on this post is a thermometer and not a barometer, but I couldn’t find any cool graphics of an exploding barometer!
-Luke Sidewalker
-Current balance $24.30
{ 5 comments… read them below or add one }
I thought the thermometer was indicative of the Fed clowns making your blood boil!
Actually, I think the thermometer is a better idea. Why? Consider: The barometer gives “Atmospheric weight.” Therefore, an “Exploding Barometer,” as you requested, would be just the opposite of what you wanted. That would indicate that the Fed’s claims carry considerable weight.
Maybe you ought to locate a picture of a Polygraph with chart, instead.
On second thought, how about a “Justice” scale? Gold bar on the one side, considerably heavier than the Fed’s claims.
Well, the dollar is certainly set to explode whether in barometer or thermometer form.
Ted Butler says hi… take the $24.30 and buy some silver from http://www.momsilvershop.com