Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: PaulM who wrote (34318)	5/21/1999 5:35:00 AM
From: Alex	Read Replies (1) \| Respond to of 116764

GREENSPAN'S SCAM By JOHN CRUDELE ------------------------------------------------------------------------ THE Federal Reserve is perpetrating a fraud. And while the press and public may not be wise to what is going on, the financial markets are. Here's how this scam goes. Alan Greenspan and his pals at the Federal Reserve now admit that they are concerned with inflation. And they said after their latest policy meeting this week that they might push interest rates higher. The stock market behaved predictably. It fell in anticipation of this new revelation and even declined a bit after the communique, as the Fed likes to call its high-falutin' pronouncements, was actually made public. But within an hour or so of the Central Bank's decision, the stock market started to recover - the bubble, it turns out, was safe for another day. Wall Street should have shrugged off Mr. Greenspan's scare tactics. The Fed chairman has meowed before - it started as a roar - that he was going to raise interest rates and hasn't. The financial community knows the truth. Unless Greenspan is willing to risk popping the financial bubble that he helped create and take the subsequent grief now and throughout history, all he can do is threaten. In fact, Greenspan and the Fed are so afraid of precipitating a crash that they won't even threaten to raise interest rates without taking actions that tell the pros in the financial markets that they aren't really serious. For instance, last Monday - the day before the Fed's Open Market Committee met to discuss tightening rates - the Federal Reserve conducted two "coupon passes." This may be meaningless to ordinary interest-rate watchers, but this is a very significant action. It means that the Fed went to banks and re-purchased billions of dollars in government bonds. Which, in turn, means the banks suddenly had billions more in liquidity to, say, lend to customers. And giving banks the ability to lend more money is the direct opposite of raising interest rates, which would make money less available, not more. But the Fed didn't do just one coupon pass on Monday; it did two. And it did another two on Wednesday, the day after the Fed indicated that it was leaning toward tightening interest rates. So why is the Fed saying one thing and doing the opposite? That's the scam - the Fed won't say anything about raising interest rates without issuing an insurance policy just in case the markets react. I wasn't a fly on the wall at the Fed meeting last Tuesday, but it's easy to guess what transpired. We already know that several presidents of regional Federal Reserve Banks are nervous about inflation - as we all should be. But there is also the little matter of the bond market. As this column has been saying - in a very lonely voice - the U.S. bond market has already raised interest rates more than a full percentage point since the last time the Fed decided to "cut" rates. So whatever the Fed ultimately decides is really meaningless. The free market has already done the Fed's job for it. Back to the FOMC meeting. There are those at Tuesday's meeting who have a healthy fear of inflation. And there are those - Greenspan included - who have a realistic understanding of what could happen if the Fed is deemed market-unfriendly. Telling the world, as the Fed did this week, that it is "concerned about the potential for a buildup in inflationary imbalances" and might raise interest rates isn't good for the market - the bubble protectors understand. So the Fed needed to wink a "just kidding" to the financial markets even as the words "interest-rate hike" were coming out of its nervous mouth. The coupon passes were the winks. But there's a problem with saying one thing for public consumption and negating the words with private, esoteric actions. The difficulty is that things like a multibillion-dollar re-liquidation of the banking system can't really be done in private. nypostonline.com

To: PaulM who wrote (34318)	5/21/1999 8:05:00 AM
From: long-gone	Read Replies (2) \| Respond to of 116764

And while we are on the topic of manipulation of gold price, whose side is the World Gold Council on? While the gold price is falling, why are they not looking for more ways to improve it? Why are they not questioning the (near total) lack of gold funds offered to the American Worker via 401k's in the workplace, AND FINDING a way to CORRECT the problem? A very big part of the problem of gold price is related directly to fund flows! Many of both the most bullish and bearish investors believe(understand) the US workforce MUST increase over the next 50 years and the world population WILL only go up from here. Why are they not finding a better way to sell the existing temporary oversupply of gold? Does the World Gold Council want a lower or higher gold price? The largest single stockpile of wealth in the average US household is currently in the stock market not in their home, small business, farm or ranch, savings account, or precious metals. Some accountings show the average exposure of that average household today to the precious metals market to be only 1/10000 of 1% , when over the prior ten years ago period this may have been 2- 10%. Why are they not going after that 2-10% of total net worth of the USA? Why does not the World Gold Council open an independent precious metals storage facility and market bullion funds? We need to ask the hard questions!