I would like to have mentioned this a few days ago but for obvious reasons I was too busy.
If you haven’t been following the economy closely for the last week or two you may not have noticed that the federal reserve has been very active in throwing fluff at the market. This has manifested itself in a misplaced belief that the market may be recovering.
It’s time for a reality check. Nothing has changed fundamentally in the monetary policy of the fed and in fact they have furthered coming inflation through an additional rate cut and attempts at increasing liquidity by dumping money on the market.
This is where the good news comes in. When the fed takes these steps the market typically reacts positively in the short term as it has done for the past 2 weeks or so. This has pushed foreign currencies and precious metals down from their recent highs and created a new buying opportunity. It’s a certainty that until our country stops incurring war debt and our monetary policy is changed to end inflationary credit that the dollar will continue to slide making investments in foreign currency and precious metals a sure bet.
It’s impossible to know in the near term how many more surprises the fed is going to spring in order to delay metals and currencies from returning to their highs, but rest assured they can’t fool me and they can’t fool the market for long.
Mr. Bernanke can tell me one thing but the fact that the Swiss Franc and Canadian Dollar both traded above the value of the dollar and the Australian Dollar is just pennies away proves he is obscuring the facts.
Tags: AUD, Bernanke, Foreign Currency, infaltionary credit, Monetary Policy, War spending
