Friday, August 17, 2007

Back Up the Trucks

17 August 2007

Well, Chairman Bernanke lowered the primary credit rate today to 5.75%, in the face of indisputable evidence of rising inflation. We now know he is cut from Greenspan's cloth (yellow is the colour of the stripes).

I have no idea if this will help the broad investment markets, but the move is extremely bullish for precious metals

Time to back up the trucks in the precious metals sector.

Somewhat humbly, may I add here that I commented on today's market action on March 13, 2007 - 5 months before it occurred. Sometimes by applying logic to current events, it is possible to see future directions. If you'd like to see my in-depth analysis of what happened today --- I wrote it on March 13. Click here for further analysis of "today's" events!

For a more objective view than my own - click here for an outstanding Financial Times editorial. And for the ultimate analysis of financial manias, panics and crashes - read this book! And finally, if you'd like the ultimate music video (parody) version by Dr. Glenn Hubbard of Columbia Business School, click here!

(Note: It is no secret that gold and silver do best when interest rates are rising - but that is because central banks have no other recourse when all the stops are pulled out on inflation. The present leadership of the US Federal Reserve Board are artful deniers of inflation, even when evidence that it is out of control abounds. This time will be no different. But gold and silver will be much higher by the time that Bernanke and his cronies finally get around to raising rates to tame the inflation genie. At long last, Mr. Bernanke has shown his hand, and he is an inflation denier, not an inflation fighter, as he has historically asserted. In wisdom, act accordingly.)

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