Bernanke's Blink + Bluff = Buckle Up for Blast Off...
So much for all of Bernanke's huffing, puffing
and threatening to blow the inflation house down.
Pay no attention to the rally in the market, or the
little man behind the curtain covered in green ink.
Nothing has changed.
It's still all about Bernanke & Paulsen's
big fat LIE.
Liquidity + Intervention + Exports
= Value/Direction of Stock Market
And given that housing and credit continue to unwind,
the last thing Bernanke, Paulsen & Co. can afford right
now - is a stock market collapse.
So, rates will be cut. Liquidity will be injected.
Intervention will continue. And the dollar will
continue to be competitively devalued to prop up
US Multi-National exports, earnings...and the market.
The LIE will continue, because it has too...
Citigroup has gone from being a subprime lender,
to becoming a subprime borrower - with the 11%
rate on their cash infusion of Arab oil money.
Today, yet another multi-billion dollar write off by
a major bank - this time by UBS (requiring yet another
cash infusion of Arab oil money).
Bill Gross is calling for a 3% Fed Funds rate.
And Hank Paulsen is leading the charge for a
bailout of subprime lenders via a rate freeze
on adjustable rate, subprime loans.
All good for gold.
Gold has held up very well considering that it's
taken a hit from yet another Yen-carry shakeout,
a Dow correction, and a collapse in the Oil price.
Gold as money, is still outperforming
all major currencies:
+ 28% against the US Dollar
+ 20% against the Euro
+ 14% against the Japanese Yen
+ 13% against the Swiss Franc
Bernanke has already blinked twice, and now he's
getting ready to flip-flop from his bluff and puff
on headline inflation, and appears ready to take the
Fed Funds rate down to the 3% range.
And for gold bugs - that means one thing...
Buckle Up -- and get ready to enjoy the ride.
S.O.T.B. |
