That's because even a small tightening of the interest rate screw would have dire consequences if applied to the $2 quadrillion of borrowing amassed in the derivatives market.
The opportunity exists now, but it won’t last forever. There may even come a day when the opposite is true – hard assets are overpriced with inflation expectations running way ahead of actual inflation realities and financial assets offering tremendous value as a result.
The Fed opened up the firehose this week. More fiat currency for the banks. Reverse repos, and new $500 billion repo facility. The banks don't trust each other.
This week’s Fed statement was another non-story. They added a new line about continuing to “assess progress” which some interpret as a step toward tapering.
I ordinarily do not spend time reading the FOMC policy statement after it’s released, saving that brain damage for CNBC. But I read the June release to assess for myself whether or not the Fed had tilted toward a more “hawkish” policy stance..
Was there really an exemption for London clearing firms for Gold? Does it matter when the rest of the World has adopted Basel III? Will London Gold traders be forced to comply by other markets?
Some of you will question why it's valuable to document the obvious price-rigging by The Banks. The answer? Because remarkably there are still "analysts" ...
We are entering a situation that could turn into a true oxymoron where lower prices equal higher prices as early as this week at the Fed’s Federal Open Market Committee meeting. I’ll tell you how that works.
Demand for physical bullion is unprecedented. However, the paper markets, where price discovery is purportedly done, remain untethered to physical supply and demand.
