Fake Money, Fake News!

The Federal Reserve has faked out the gold market with fake news… and provided us all a chance to buy gold at bargain prices!

It seems funny to thank the Fed for anything, after the damage it has done to the US economy and the dollar all these years.  But whatever the reason, we are glad to have a chance to buy more gold and silver for less money!

Here’s the story in a nutshell.  Last March, Fed chairman Powell said he could foresee no increases in interest rates before 2024.   

Then, in the face of rising price inflation, the Fed signaled on Wednesday (6/16) that it could raise interest rates by the end of 2013.  

The Fed is a notoriously bad economic forecaster.  Its guesses about what the GDP would do over the years have been so wide of the mark that if the Fed predicted that the sun will rise in the morning, for the first time in human history, you might not want to bet on it.  

Now the Fed is predicting what it will do by the end of 2023.  

Not the end of this year.  Or the end of next yesr.  

At the end of the year after that!  

Puh-lease!

Even Powell said the Fed’s projections “should be taken with a grain of salt.”

Chuck Butler, who writes The Daily Pfennig, shares our view about what the Fed might do down the road:

“The key here is they are saying 2023… if I’m not blind, and can see a calendar, that’s 1 1/2 years from now… There’s a whole lot of good and bad that can happen between now and 2023… So, why were the markets so moved to push all these asset classes to lower levels? Well, for one, they were surprised by the statement… And they got their panties all in a wad, when Powell sounded so hawkish…  

“…  The Fed admitted that prices are rising faster than they forecast 3 months ago… So, if their forecast for prices is wrong, then their forecast for rate hikes is probably going to be wrong too… 

“I know what the Fed is thinking here folks… That inflation is rising faster than they expected, and their hands are tied for now to combat it, so they’ll try to jawbone inflation down with talk of rate hikes 1 1/2 years from now… 

“And in the end… What they have done is give every procrastinator a buying opportunity… When was the last time you could get Gold below $1,800 or Silver below $27?”

So even though the Fed intends to leave its fake money pumping at a rate of $120 billion a month, $1.44 trillion a year, suggesting that it will pull forward any rate increases spooked some people on Wall Street, creating a buying opportunity for savvy investors.