Took a vacation from blogging for 2 months but the latest FOMC report from the Federal Reserve has gotten me back in action. Pretty short read. The whole text can be found here: http://federalreserve.gov/newsevents/press/monetary/20091104a.htm
Federal Reserve people are like scared ducks in a pond. They look calm on the surface but underneath the water they are paddling furiously. That's why you need to really look at what they are saying in these reports because it all sounds quite benign. It isn't.
"In order to promote a smooth transition in markets, the Committee will gradually slow the pace of its purchases of both agency debt and agency mortgage-backed securities and anticipates that these transactions will be executed by the end of the first quarter of 2010."
Agency debt is one of the reasons the financial collapse started. Agency debt is created by surrogates of the US Government created by the US Government. The US Government has taken no action AT ALL conerning US Sponsored Agencies, their policies, practices nor the legislation that mandates their actions and behavior. Everything that has caused the intial problem has continued, unabated, and even somewhat augmented by stimulus activity.
The Federal Reserve bank is basically saying in their report, "We've been buying your crap to keep you afloat. While we were risking our own solvency, you did nothing. Starting 2Q10, you are on your own".
===> If you are in the US and most of your holdings/cash are US dollars, you probably need to find an entry point to buy more gold. The price of gold is not going up. The value of the dollar is going down which makes it look like gold is expensive. We are just getting started.
Well, geez, this was certainly depressing. Hmmph, my co-worker who says she buys jewelry and tells her husband it's a good investment sounds like a financial whiz kid!
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