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FOMC confirms PM fundamentals remain strong

derrybderryb Posts: 36,825 ✭✭✭✭✭
Fresh from the wire services on the FOMC meeting this week:

"The Federal Reserve held fast to its ultra-accommodative monetary policy Wednesday, solidified by what board members described as an economy weakened by fiscal policy."

Of course they took no credit for what their monetary policy is doing to the currency. The FED's balance sheet has ballooned to more than $3.3 trillion, mostly with purchases of questionable debt using newly created dollars.

Fundamentals are what gave metals its historic rise following a real estate bubble that was fueld by low interest rates and easy money. While I believe a decline in asset prices will lead to metal volatility over the short term and could lead to $1200 gold and $18 silver over the intermediate term, I expect zero percent interest rates and contnued easy money to eventually fuel another housing bubble and blow up the bulging equity and bond markets. The long term holder of metals will be greatly rewarded just as he was when the smoke cleared after the real estate fiasco.

Those looking for a quick buck in metals will not see it in the near future. Those looking for long term wealth protection (and potential record returns) should contine to buy the dips and continue to build the stack. Until metal shows strong upward legs, quick profits with PMs should be sought only in collectibles, preferrably graded collector coins. Consider this bad opinion or good advice.

"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

Comments

  • OPAOPA Posts: 17,121 ✭✭✭✭✭


    << <i>Until metal shows strong upward legs, quick profits with PMs should be sought only in collectibles, preferrably graded collector coins >>



    derryb.....couldn't agree with you more, but I would add: "rare silver art bars" to that list. Been doing that for over 1 year.
    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • guitarwesguitarwes Posts: 9,266 ✭✭✭
    Thanks derrryb. I, for one, always value your bad opinions and good advice.
    @ Elite CNC Routing & Woodworks on Facebook. Check out my work.
    Too many positive BST transactions with too many members to list.
  • tneigtneig Posts: 1,505 ✭✭✭
    Ditto.

    Still feels shaky though. I wonder if some will sell if it goes further down. (not counting emergency selling)

    (Read a TrowePrice update about the risk of bonds with possible interest rate rises.)
    COA
  • derrybderryb Posts: 36,825 ✭✭✭✭✭
    the FED losing control of interest rates is the key. Markets eventually dictate real prices just as they did with real estate.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • derrybderryb Posts: 36,825 ✭✭✭✭✭
    How to force people into gold

    This has hammered the euro and spiked the dollar index this morning with no negative affect on gold. As most of us know a strong dollar index does not equate to the dollar's stateside purchasing power, it is just the result of a weaker euro and/or a weaker yen - a comparative measuremnet.

    Stack on.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • rickoricko Posts: 98,724 ✭✭✭✭✭
    Appreciate the good advice (usually beats my gut feeling image ).....Cheers, RickO
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    Agreed.

    Let's just hope prices do not drop another 30-40%.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

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