So, is Mr. Bernanke…
a) Stupid?
b) Desperate?
c) Out of touch?
d) In total control?
a) No
b) Yes
c) Possibly to a degree, given the dimming effect academia tends to have on Keynesian types
d) Yeh, right
Still, all the man had to do was utter some gentle words on interest rates and the markets complied for a day at least, with the dollar down, gold down, stock market up and commodities up. You do know that these inflationists WANT commodities up don’t you? That is why I call these people desperate; they know full well that any hoped-for recovery is going to be attended by rising prices and costs given its origins in overdriven money printing. This obviously gives the lie to the Fed’s “Price Stability” mandate.
The attached chart shows the parameters on the short term stock market recovery that we had expected. The SPX along with gold, gold miners, commodities and China all remain at or near resistance levels from which they can turn back down, as expected. I say “can” because my black box, the one with the remote market controls, is shorted out and in the shop for repairs.
Getting back to point a), he is not stupid and the reason I believe he is desperate is that on the surface it seems outrageous that he pretends to be able to control interest rates at near Fed Funds zero. What does he know about the sustainability (lack thereof) of ‘the recovery’? What does he know about the Treasury’s ability to fund itself despite the long bond near crucial biggest picture support? Why dare he not upset the markets at a time when ‘the recovery’ is obviously in play and commodity (and gold) prices have been rising?
It is obvious that Ben sees a strong dollar and intends to play off of that. But what is the dollar recovery other than a reflection of scared money knee jerking out of the suddenly unsound euro. NFTRH you will recall, never considered this alternate confidence note as being sound. It appears Bernanke is playing around in the slop between the global public’s continued confidence in these and other paper debt notes and the day when said confidence hits critical mass to the downside. That will be the day that gold, still looking constructive in most major currencies, is gone for real in a bull market across the board.
Dialing it back in to short term events, review the attached chart. There’s the resistance. Let’s see if hope has some power left or if it will continue to wane.
Regards,
Gary
http://www.biiwii.com
http://www.biiwii.blogspot.com
