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Inflation About to Become a Massive Headache for Central Bankers
With the recent new monetary policy initiative by the Federal Reserve, one area that I’m becoming more worried about is the impact this will have on inflation. While inflation has declined from the highs in the 1970s, there is always the worry that monetary policy could ignite the flame of higher prices in the future.
Many analysts and investors have been hesitant about the rally in the S&P 500. While I wasn’t surprised with the rally into the Federal Reserve announcement, I thought it highly likely that the S&P 500 would have a pullback in the fall. However, it appears that the S&P 500 is continuing its strong move up and, at this point, it would be quite dangerous to bet against this rally and the Federal Reserve.
In the article “Didn’t Get into Gold Early Enough? This Other Metal’s Your Second Chance,” Lombardi states that, in the past few weeks, silver prices have increased significantly. While he concedes that gold bullion prices have done the same, he notes that by looking at the percentages of these increases, you can see that silver prices have outperformed gold bullion.
Original Article Published at www.investmentcontrarians.com
In a recent editorial, I talked about QE3 (a third round of quantitative easing implemented by the Federal Reserve) and how it was a reward largely for the upper echelons of income-earners. The middle class will benefit due to the lower carrying costs, but the rich will really be the net benefactors of this monetary policy.
Wall Street Week Ahead: S&P to fly after wild ride to Wyoming
The streak is over, but is the trend intact?
A six-week string of gains in the S&P 500 (^GSPC) ended on Friday amid shifting expectations for central bank stimulus. This week could bring clarity on that issue, and that could determine whether the recent rally that took the index to four-year highs will persist.
Global markets rallied today on news that ECB President Mario Draghi stated that the ECB will do everything it can to bolster periphery credit markets. The street took the statement with a fair amount of skepticism but I didn't. Draghi is no EU bureaucrat from Brussels. He's a man of character who means what he says and he won't be bullied; especially by the Germans. The two LTRO's (Long Term Refinancing Operations) he implemented as ECB President prove my thesis. The Germans were not pleased with these operations yet he moved forward with them nonetheless.
In the not so distant past arguing that precious metals prices were setup to fall generally elicited a response which was not real pleasant. In fact, during gold’s infamous bull market rally on several occasions I called for pullbacks which regardless of the accuracy of my call generated hate mail that seemingly never ended......