Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Massive Stock Market Price Reversion May Be Days or Weeks Away - 22nd Sep 19
How Russia Seized Control of the Uranium Market - 22nd Sep 19
Dow Stock Market Trend Forecast Update - 21st Sep 19
Is Stock Market Price Revaluation Event About To Happen? - 21st Sep 19
Gold Leads, Will the Rest Follow? - 21st Sep 19
Are Cowboys Really Dreaming of... Electric Trucks? - 21st Sep 19
Gold among Negative-Yielding Bonds - 20th Sep 19
Panicky Fed Flooding Overnight Markets with Cash - 20th Sep 19
Uber Stock Price Will Crash on November 6 - 20th Sep 19
Semiconductor Stocks Sector Market & Economic Leader - 20th Sep 19
Learning Artificial Intelligence - What is a Neural Network? - 20th Sep 19
Precious Metals Setting Up Another Momentum Base/Bottom - 20th Sep 19
Small Marketing Budget? No Problem! - 20th Sep 19
The Many Forex Trading Opportunities the Fed Day Has Dealt Us - 19th Sep 19
Fed Cuts Interest Rates and Gold Drops. Again - 19th Sep 19
Silver Still Cheap Relative to Gold, Trend Forecast Update Video - 19th Sep 19
Baby Boomers Are the Worst Investors in the World - 19th Sep 19
Your $1,229 FREE Tticket to Elliott Market Analysis & Trading Set-ups - 19th Sep 19
Is The Stock Market Other Shoe About To Drop With Fed News? - 19th Sep 19
Bitcoin Price 2019 Trend Current State - 18th Sep 19
No More Realtors… These Start-ups Will Buy Your House in Less than 20 Days - 18th Sep 19
Gold Bugs And Manipulation Theorists Unite – Another “Manipulation” Indictment - 18th Sep 19
Central Bankers' Desperate Grab for Power - 18th Sep 19
Oil Shock! Will War Drums, Inflation Fears Ignite Gold and Silver Markets? - 18th Sep 19
Importance Of Internal Rate Of Return For A Business - 18th Sep 19
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Fed Ends QE? Greenspan Says Gold “Measurably” “Higher” In 5 Years

Commodities / Gold and Silver 2014 Oct 30, 2014 - 01:07 PM GMT

By: GoldCore

Commodities

As expected, the Fed announced yesterday it would end its six year money printing and bond buying programme.

Given the fragile nature of the U.S. economy, Eurozone economy and indeed the global economy, Fed critics continue to believe that this may be a short term hiatus prior to a resumption of QE, if asset prices start to fall or economic growth falters.

Former Federal Reserve Chairman Alan Greenspan admitted yesterday to the Council on Foreign Relations (CFR), that QE and the Fed’s bond buying program, which aimed to lower unemployment and spur stronger economic growth, fell short of its goals.


It has been a busy week for the man once known as "Maestro”. The end of last week saw him engage in public discussions with the likes of Marc Faber and Peter Schiff at the New Orleans Investment Conference.

Ominously, Greenspan warned at the New Orleans Investment Conference that the Fed’s balance sheet is a “pile of tinder” and gold is a “good place to put money these days” as it will rise “measurably” in the next 5 years.

He told the CFR that the bond buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.

“Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” Greenspan said. Boosting asset prices, which aids the already wealthy, however, has been “a terrific success.”

When asked about QE, Greenspan made the unusually frank admission that “the Fed’s balance sheet is a pile of tinder, but it hasn’t been lit … inflation will eventually have to rise.”

Greenspan, who headed the Federal Reserve from 1987 to 2006 surprised guests in New Orleans when he stated bluntly, "I never said the central bank was Independent!" in response to criticism that the Fed was financing social programmes.

This stunning admission, if true, begs the obvious question: to what extent are the current policies of the Fed and other central banks the result of careful reasoning by independent monetary experts and to what extent are they being dictated by politicians desperate for public popularity and reelection or worse still by unelected powerful banks and bankers?

Greenspan said that currency debasement had failed to foster economic growth and unemployment had not been alleviated. However, at least asset prices had been boosted which he described as a "terrific success."

So Wall Street reaped tremendous benefits from QE while main street flounders and taxpayers, both living and yet to be born, have the privilege of footing the USD 4,000,000,000,000 bill - that is $4 trillion. He also indicated that ending QE would "unleash significant volatility in markets."
In what may be the saving grace of his legacy, he continues to expound the virtues of gold.

In New Orleans, he was asked why central banks still own gold. His answer was encouraging if a little vague, "Gold has always been accepted without reference to any other guarantee." When asked where the price of gold was headed in the next five years he said "measurably” “higher."

Question: “Where will the price of gold be in 5 years?”
Greenspan: “Higher.”
Question: “How much?”
Greenspan: “Measurably.”

He told the CFR that "gold is a good place to put money these days given it's value as a currency outside of the policies conducted by governments."

So, the primary policy the Fed has - which is to put a floor under favoured markets and support U.S. bond and asset prices and give the process a complicated sounding title - has failed, according to the ‘Maestro’ who devised said policy.

What happens next? We don't know but for once we would be inclined to follow Mr. Greenspan's advice.

As we discussed last year, Mr. Greenspan is not the only person to have chaired a major central bank who views gold as a highly relevant strategic asset.

Mario Draghi, head of the ECB and former governor of the Bank of Italy, has this to say:

"Well you’re also asking this to the former Governor of the Bank of Italy, and the Bank of Italy is the fourth largest owner of gold reserves in the world, which is out of all proportion to the size of the country. But I never thought it wise to sell it, because for central banks this is a reserve of safety, it’s viewed by the country as such.”

“In the case of non-dollar countries it gives you a value-protection against fluctuations against the dollar, so there are several reasons, risk diversification and so on.”

The smart money continues to understand the importance of gold as diversification.

Marc Faber, who also spoke at the New Orleans Investment conference, summed up our view perfectly when he suggested that each individual should be their own central banker, holding the reserve currency that is gold as insurance against government bungling.

GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,205.75, EUR 958.09 and GBP 753.59 per ounce.
Yesterday’s AM fix was USD 1,228.00, EUR 963.67 and GBP 761.65 per ounce.
Gold fell $17.40 or 1.42% to $1,211.20 per ounce yesterday and silver slid $0.14 or 0.81% to $17.07 per ounce.

Gold for Swiss storage or immediate delivery dropped 0.7% to $1,203.22 an ounce in late trading in London. The yellow metal hit $1,201.53 today, its lowest since October 6th.

Gold for December delivery slid 1.8 % to $1,202.50 on the Comex in New York. Futures trading volume was 65% above the average for the past 100 days for this time of day, data compiled by Bloomberg show.
Silver for immediate delivery slipped 1.5% to $16.60 an ounce in London. Platinum fell 0.7% to $1,251.75 an ounce. Palladium lost 0.9% to $787.50 an ounce, after a five-day bull run.

Gold fell on the expected Fed announcement and confirmation that the Fed is to end QE and their highly unorthodox money printing and six year monthly bond purchasing programme.
The move was not unexpected by precious metals market participants and therefore the sudden sharp selling raised some eyebrows. Indeed, it has all the hallmarks of continuing manipulation of the gold and silver futures market.

If the mooted end of QE is bearish for gold and silver, then it is also equally bearish if not more so for overvalued stock and bond markets. Yet, those markets saw far less volatile trading and saw minor losses - the S&P closed down just 0.14%.

The move lower yesterday also took place despite very high global coin and bar demand in recent days which would ordinarily have led to higher prices. It also comes at a time of heightened geopolitical and economic concerns and the emergence of the Ebola virus. Not to mention, the bullish “Save Our Swiss Gold” initiative.

Is yesterday’s trading another sign of manipulation? If it walks like a duck and quacks like a duck ...

Gold is testing support at $1,200/oz and below that is support at the triple bottom at $1,180/oz.
Prudent money will continue to dollar cost average into coins and bars on price weakness.

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules