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POSTED ON November 21, 2022  - POSTED IN Original Analysis

Interest rate hikes get most of the attention as the Federal Reserve fights inflation, but balance sheet reduction is arguably more important. And it’s not going well.

Since the Fed stopped buying Treasuries and started letting bonds fall off its books as they mature, the bond market has experienced increasing volatility and liquidity problems. In fact, there is already talk about the possibility of the central bank abandoning quantitative tightening.

POSTED ON May 5, 2022  - POSTED IN Key Gold Headlines

The Federal Reserve came through with the second rate hike of this tightening cycle, bumping up the Fed Funds rate by 0.5%. It was the biggest interest rate boost by the Fed since 2000. But given the extent of the inflation fight, this hardly seems like a bold, aggressive move. In fact, it was a weak swing that looks more like shadow boxing. And one has to wonder just how long the Fed can stay in the ring.

POSTED ON February 18, 2019  - POSTED IN Key Gold Headlines

On Friday. Pres. Trump declared a national emergency. Based on that declaration, the president will reallocate $6.5 billion from other government programs to fund a border wall.

In his podcast on Friday, Peter Schiff said there is indeed a national emergency, but it has nothing to do with the border.

Of course, the real national emergency is not the lack of a wall, the failure to build a wall, but building up the national debt.”

POSTED ON January 28, 2019  - POSTED IN Key Gold Headlines

Stocks got a boost on Friday and gold rose 1.8% on further signs that the Federal Reserve is capitulating.

An article in the Wall Street Journal basically confirmed the Fed is now thinking about winding down its quantitative tightening program. As a CNBC headline put it, “The Fed may be moving closer to ending its rally-killing balance sheet reduction.” As Peter put it in a recent podcast, “The Federal Reserve is having to prematurely abort quantitative tightening, which is exactly what I said they were going to do before they shrunk the balance sheet by the first dollar.”

Not too long ago, it was on autopilot, they were just going to leave it alone and it was going to keep on going and then the market started to cave and then they change that to, well, we’re data dependent and now the market starts to go down a little bit more and all of a sudden we’re almost done. “

POSTED ON September 19, 2017  - POSTED IN Key Gold Headlines

The Federal Reserve Open Market Committee will meet this week. There is virtually no expectation of a rate hike this time around, but there is widespread anticipation that the Fed will outline its strategy for shrinking its massive balance sheet.

In his most recent podcast, Peter Schiff made a pretty good case that the Fed won’t be able to shrink the balance sheet at all. I fact, he says the central bank will end up having to expand the balance sheet even more when it’s all said and done. The deteriorating economy is one factor, but an even bigger problem for the Fed is the exploding national debt.

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