Friday, October 8, 2010
Phil Flynn: Give Me That Old Time Inflation
The Fed wants commodity prices higher to inspire economic activity as business start to fear that use it or lose it in relation to the spending power of their devalued dollars. The Fed wants inflation and they know how to create it and you cannot get in the Feds way. It is as I wrote the day after Quantitative Easing 1 March, 2009 when I said, "I fought the Fed and the Fed won. I fought the Fed and the Fed won.
Needed money so they printed some, I fought the Fed and the Fed won." I went on to say, “ do not underestimate the way this Fed can change the marketplace. The Fed's timing of this move to quantitative easing still has the market coming to grips with the shorter and longer term effects on the economy and the markets. The one thing that is for sure is that the rules of the game have changed.
And when it comes to a knife fight and Fed power, there are no rules. Someone say one, two, three, gold! In a blink of an eye the Fed, with its unlimited power to print money, can change the dollar value of a commodity or its long term trend in an instant. By creating inflation and money out of thin air they can.......Read the entire article.
Watch "How to Take Money and Emotion Out of The Gold Market"