FED to the Rescue............Again!!
Fed Chairman Ben Bernanke was on the Hill today testifying before the U.S. House of Representatives Financial Services Committee. You know he must just hate these days especially with his good friend Ron Paul peppering him with questions. Today, the Fed basher asked if Mr. Bernanke thought gold was money – his answer was “no”. He then asked why central banks hold gold on their balance sheets. The answer, “tradition, I guess”. You can just see Eric Sprott with a big grin on his face by now!
Bernanke appears to be signalling QE3 – hence the big move up in equities and commodities again. He stated that “the possibility remains that the recent economic weakness may prove more persistent than expected and that deflation risk might emerge, implying a need for additional policy support.
Veteran hedge fund manager Doug Kass has posted on his site that he thought the markets were like “the munchkins rejoicing (yet again) for quantitative easing”. To me, I am reminded of the classic scene from Monte Python’s “The Holy Grail” called the “Black Knight”.
The Fed is running out of ammo – extending maturities, lowering rates further etc. etc., and they seem to be grasping at straws. What’s next? Dropping cash from a Boeing Dreamliner? Right – like that will ever be delivered! Enjoy the video – I know what I will be watching this weekend with a few friends and cold ones!