Complete and total intellectual bankruptcy of Federal Reserve was confirmed this past week. Creation and collapse of two financial bubbles in eight years would seem to suggest monetary philosophy of Federal Reserve is fatally flawed. Core rate of inflation as a tool for managing monetary policy should be declared dead, and buried in history books of foolish thinking. The entire time the Federal Reserve was driving interest rates to 1% we were told all was well because core inflation was tame. Worrying about the mortgage and housing bubble was unnecessary, cause core inflation was fine. All was clearly not fine! Bailout Ben Bernanke continues to mumble about core inflation as econometric models are used to guide the Fed's thinking. The now much poorer investors in quantitative hedge funds might explain to Bailout Ben the risks of relying on computer models.
Central banks around world have essentially eased, lowering interest rates below market equilibrium. Such action is inflationary, and will reduce the value of your money. Gold will clearly be a beneficiary of this easing. Gold has already demonstrated that it is a better investment than most quantitative hedge funds, which have been hemorrhaging investor money. Gold stocks, as shown in chart, are over sold, being ignored by investors, and should be bought. Canadian investors, especially, should look at action of CN$ after “default” by COF. Canadian dollar is likely to experience continued selling due to this event. Gold and perhaps Gold stocks at this level are the only havens from financial meltdown.
GOLD THOUGHTS are from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report, monthly, and Trading Thoughts, weekly. For a subscription go to http://home.att.net/~nwschmidt/Order_Gold_EMonthlyTT.htmlNed will be exploring the Gold Super Cycle at The Wealth Expo in NYC, 19-21 October. For information go to www.wealthexpo.netTo receive a copy of the new Agri-Food Value View, an exploration of Agri-Food Super Cycle, write agrifoodvalueview@earthlink.net
Ned W. Schmidt, CFA CEBS is publisher of THE VALUE VIEW GOLD REPORT - Coverage of the emerging GOLD SUPER CYCLE. Explores the situation in Gold that may carry it to $1,225. To subscribe Click Here. A trial period is available by Clicking Here
Ned W. Schmidt, CFA CEBS is a nationally recognized authority and speaker on a variety of investment topics, including value investing and global capital flows. Currently, Ned is Resident of Schmidt Management Company in DeLand, Florida, specializing in financial engineering. The firm’s proprietary research influences about $15 billion in assets, and is investment advisor to the Argyle Global Equity Appreciation Fund.
Most recently Ned served as the Visiting George Professor of Applied at Stetson University where he taught institutional money management. Preciously he had been a Senior Vice president with a trust company where he had the responsibility for discretionary investments of $3.5 billion.
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Disclaimer
The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com,
is strictly prohibited. In no event shall GoldSeek.com or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.
OilSeek.com
