Fed Up Friday: July 30 – August 5

Your weekly dose of the Fed’s latest antics.

Bank of England Slashes Rates, Gold Surges Forward

It’s important to remember that it’s not just the US Federal Reserve that launches the price of gold upwards with every misguided decision. As we predicted on Wednesday, the Bank of England dropped their interest rate to record lows in order to combat their struggling post-Brexit economy. The main result for the precious yellow metal was nearly a half-point surge in value overnight, bringing it closer to the $1,400 mark.

Fed Admits Stale US Economy May Be the “New Normal”

The Fed this week began coming to terms with the “shocking” truth (which we’ve known for years): trillions of dollars in stimulus and zero interest rates don’t actually breathe life back into the economy. Over the past few years, Janet Yellen has transitioned from a staunch rejectionist of secular stagnation in the US economy, to admitting last month that: “Maybe more of what’s causing this neutral rate to be low are factors that are not going to be rapidly disappearing but will be part of the new normal.”

Former Fed Chair Greenspan Sees the Light, Calls for Gold Standard

In a drastic shift from his time as the Fed Chairman, Alan Greenspan discussed on Bloomberg about how gold is the epitome of a steady, predictable, and faithful investment, and has been for thousands of years.  During a discussion with Bloomberg News, Alan Greenspan echoed the need to return to a gold standard as a steady, predictable investment. Greenspan also suggested the spread between the 5 and 30-year treasury bonds is an indicator of the lack general lack in faith investors have about the US economy.

He cautioned those looking for investments made in hopes of financial growth in the long term. “For an investment you make that, say, lasts thirty years, the present value of the income you’re expected to receive … is so heavily discounted in today’s environment that the present value is … close to zero.”

Fed Fires at Goldman for $36 Million, Only Have Themselves to Blame

In an unusual move, the Fed decided to penalize Goldman Sachs for an information leak that happened two years ago – one which Goldman had already paid $50 million to resolve. What’s even more awkward is that the leak originated from one of its own employees. On top of that, the Goldman employee who received the documents was also a former Fed employee. Whoops.  Goldman, under the terms of the settlement must strengthen its programs in place that prevent employees from requesting or receiving sensitive information. The Fed might need to examine its own programs as well.

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!