Dr. Ron Paul shared his free market perspective of Federal Reserve policy with CNBC. Dr. Paul warned that the stability of the current financial system “depends on a psychological acceptance of this system.” He argued stocks and bonds will crash dramatically when the markets realize that ever-expanding debt and money printing have only stimulated malinvestment.
Of course, Dr. Paul’s warnings fall on deaf ears. The financial media continues to support the narrative that Fed policy is essential to economic growth. A CNBC article about Dr. Paul’s interview simply looks at the growth of the S&P 500 to conclude that “the Fed has not committed any obvious policy errors thus far.”
If all the world’s debt were backed by gold, the US dollar price of the yellow metal would be nearly $34,000. Frank Holmes of US Global Investors explains the math in an insightful article.
- 5.9 billion ounces = total above-ground gold in world.
- At $1,181 per ounce, that’s about $7 trillion.
- Total global debt = $200 trillion.
- $200 trillion divided by 5.9 billion = $33,898.
It’s an eye-opening number in a world where the gold standard reigned supreme for most of modern history.
While Marc Faber thinks the Federal Reserve should have raised interest rates years ago, he’s not at all surprised that it did not raise rates this month. In fact, he thinks the United States and global economies are too poor for Janet Yellen to raise rates at all this year. He predicts the US will be in another recession before the end of the year.
Ross Beaty is the Chairman of Alterra Power Corp and Pan American Silver. He is an expert in the energy sector and precious metals mining. Beaty spoke with Cambridge House Live about why he owns gold and silver as a protection from the economic and political uncertainties of the next decade. From disruptions in the energy sector, to unstable central bank policies, Beaty sees the potential for the world to get very “weird.” You want to own precious metals when that happens.
The price of gold shot up about 1.5% today, breaking through the technically significant barrier of $1200. Gold closed around $1185 on Wednesday, and rallied today to a peak of $1206. It now hovers around $1202.
The jump in price comes on the news that the Federal Reserve is likely to keep the federal funds interest rate at zero for some time. In a press conference yesterday, Janet Yellen hinted at rate hikes later in the year, but ultimately reaffirmed that any rise in rates is entirely data dependent.
In case you missed it earlier, here’s Peter Schiff’s analysis of the FOMC’s meeting and Yellen’s statements:
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It’s official: China now plays a small role in directly setting the price of gold in Western markets. For the first time ever, a Chinese bank has joined the twice-daily gold price fixing process run by the London Bullion Market Association (LBMA).
As we reported back in February, this news was anticipated. The LBMA has replaced the old London Gold Fix with a new, electronic mechanism in an effort to increase transparency in the gold markets.
Danielle DiMartino was a former advisor to Richard Fisher, the president of the Dallas Federal Reserve. On CNBC this week, DiMartino identified herself as an economist more concerned with the power of free markets when she cited Ludwig von Mises as one of her personal heroes. She went on to share insights into the Fed’s policy-making strategies and why the Fed has painted itself into a corner.
I would have to side with the body of thought that says the Fed has relied too long on models. It has not paid enough attention to financial stability and the seeds that are sown when interest rates are kept too low for too long. The result is never one that’s beneficial. Not for Wall Street or Main Street…”
DiMartino isn’t the only Fed insider to question the Janet Yellen’s incompetent policy and the official narrative of an economic recovery. Alan Greenspan himself has recently critiqued Fed policy and warned investors that the US economic outlook isn’t very rosy.
In this first video segment, DiMartino explains why the Fed has been incapable of predicting and noticing bubbles. She thinks that there are a number of bubbles forming right now, both domestically and abroad.
Janet Yellen held a press conference yesterday after the Federal Open Market Committee’s June meeting. Peter Schiff cuts through the doublespeak to focus on the real message behind Yellen’s official statements.
Precious metals analyst Ed Steer shared his expectations for the price of gold and silver with Cambridge House Live. While Steer believes that the paper gold markets are the main determiner of prices right now, he thinks Western investors should mimic the habits of the Chinese and buy as much physical gold and silver as possible. He believes the East is preparing for the day when the US dollar and the paper reserve currencies collapse. Like Peter Schiff and Jim Rickards, Steer doesn’t believe the Federal Reserve can raise rates this year – if ever.
In his latest podcast, Peter Schiff reviews a statement from Bank of America warning that the Federal Reserve could forgo a rate hike and start up a new round of quantitative easing.
While most are focused on the risks around a withdrawal of liquidity, we believe the biggest hit to confidence could be the opposite: if another round of US QE is necessary to prop up the economy… QE fatigue is already evident: each subsequent round of QE has seen diminishing risk rallies. Another round of QE would imply that $4.5tn was not enough. And it would also likely have a very negative read-through for QE programs currently underway in Europe and Japan.”
With even more poor economic news in the past week, it’s no wonder that some mainstream analysts are waking up to the possibility that Peter has been forecasting for months. Peter reviews that poor data in the second half of this episode.
