Fed's Policies Monetizes And Inflates Commodities
Tuesday, 22. April 2008, 03:05:37
The $CRB Chart with overlay of S&P provided by TheSmartMoney Tracker shows that the Federal Reserves Actions of lowering interest rates and faciliites of TAF, FSLF, and PDCF have monetized -- inflated the commodities: Here is the $CRB with S&P overlay chart
I believe as Mr. Larson believes that real interest rates are rising causing an explosion in commodity prices: "Fed Chairman Ben Bernanke has abandoned any semblance of caring about inflation and decided that the real concern is fighting deflation by any means necessary, including slashing interest rates to as little as -12.55%. Investors are piling into commodities and fleeing dollar investments because they are desperately trying to maintain their purchasing power in the face of a Fed that appears dead-set on destroying it."
As the real interest rate rises further, funds will continue to flow out of the 30 year US Treasuries and into commodities of all types. I also believe that the dollar will be dropping in price and as a result, gold, $GOLD, which trades inversely of the US Dollar, $USD, will soon be going up in price.
Suggested Reading
Adrian Ash provides Why choose gold when the Fed lowers the central bank interest rates
I believe as Mr. Larson believes that real interest rates are rising causing an explosion in commodity prices: "Fed Chairman Ben Bernanke has abandoned any semblance of caring about inflation and decided that the real concern is fighting deflation by any means necessary, including slashing interest rates to as little as -12.55%. Investors are piling into commodities and fleeing dollar investments because they are desperately trying to maintain their purchasing power in the face of a Fed that appears dead-set on destroying it."
As the real interest rate rises further, funds will continue to flow out of the 30 year US Treasuries and into commodities of all types. I also believe that the dollar will be dropping in price and as a result, gold, $GOLD, which trades inversely of the US Dollar, $USD, will soon be going up in price.
Suggested Reading
Adrian Ash provides Why choose gold when the Fed lowers the central bank interest rates
WIDGETIZE