Too Late For Continued Fed Tightening

Lawrence Henry Summers is a former U. S. Treasury Secretary, with an impressive resume. In a recent interview with Bloomberg Television’s Erik Schatzker, he pointed out that in spite of the Fed’s continued “tightening” policy, it will be quite some time before the interest rate gets high enough, such that it could be reduced by 500 basis points, the minimum amount typically required to offset a coming recession. He suggests that, “in the next few years a recession will come and we will in a sense have already shot the monetary and fiscal policy cannons, and that suggests that the next recession might be more protracted.”

Summers stated that the new Federal Reserve Chairman has his work cut out for him, because the economic situation he faces requires “a difficult balance between the legitimate desire to stimulate the economy and to get as much employment and growth as possible, and certainly to assure that inflation gets back to 2 percent.” So, like we’ve been saying for months, the Fed has basically spent their entire “preventive” quiver, only to learn that the mainline of attacking forces has yet to arrive. The market is weak and fading, bonds are oversold and over-valued, and the dollar is on the verge of reduction or replacement, by the International Monetary Fund (IMF), as a result of drastic efforts on the part of China and Russia.

China now has more than twenty countries signed on to their “Oil for Yuan/Gold” Program. Already on board is Russia, Iran and India, just to name a few. The Program allows them to buy or sell oil for Yuan, which can be immediately converted to gold, by way of the Shanghai Energy Exchange. The Program has allowed a number of countries, tired of U.S. sanctions and saber-rattling, to bypass U.S. hegemony and transact directly with the opposite party in Oil for Yuan/Gold transactions. Meanwhile in December, Russia inked a deal with King Salman of Saudi Arabia, to sell the Saudi’s the S-400 Defensive Missile System. The installation, once completed, will spell the end of Kissinger’s 1974 “Petrodollar” deal with King Faisal of Saudi Arabia, whereby Saudi Arabia would carry out all oil transactions in U.S. dollars, in return for complete territorial defense of Saudi Arabia by U.S. forces.

These are a few of the many reasons to consider a stiffer portfolio defense than ever before. Gold, silver, and other precious metals are well-known and well-respected hedges against all sorts of economic calamity. American Bullion is an award-winning precious metals dealer (based exclusively on customer satisfaction ratings) that has the knowledge, experience, and network necessary to make physical precious metal transactions as quick, simple, and transparent as possible. Increase your portfolio defenses before it’s too late. Call the experts at American Bullion, at (800) 653-GOLD (4653), for superior professional assistance.

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