Gold Price Plunges to $1,369, Bernanke "Blind"
GOLD PRICE NEWS – The gold price plunged $40.40, to $1,368.60 Friday as the price of gold fell amid broad-based liquidation on Wall Street. The catalyst for the decline in the gold price and the broader stock market stemmed from concerns that China is planning to hike interest rates to tame the nation's rising inflation. The SPDR Gold Trust (GLD), the most liquid proxy in the equity markets for the price of gold, settled lower by $3.97 at $133.69 per share. Silver followed the gold price lower, tumbling $1.39 to $26.02 per ounce.
After reaching a new all-time record high of $1,424 this past Tuesday, the gold price closed at the lows of the week, which historically has been a concerning sign for investors. The price of gold ended the five-day session with a $23.49, or 1.7% loss, for only the second decline in the past nine weeks.
While the threat of higher rates presents a headwind for the gold price, the world's most developed economies – the U.S., Europe, and Japan – have all pledged to keep the money spigots open to fight the ongoing deflationary headwinds facing the global economy. As a result, in spite of this week's sell-off in the gold price, the yellow metal remains higher by 0.8% in November and 25.0% year-to-date.go to
https://sites.google.com/site/goldandsilver2012/gold-price/gold-price-plunges-to-1-369-bernanke-blind
In recent months the Federal Reserve's actions have been widely debated among both investors and economists with many strongly condemning the Fed's second round of quantitative easing (QE). One of the harshest critics of the central bank, and Fed Chairman Ben Bernanke in particular, has been Nassim Taleb, NYU professor and author of the best-selling book "The Black Swan."go to
https://sites.google.com/site/goldandsilver2012/gold-price/gold-price-plunges-to-1-369-bernanke-blind
In a Bloomberg interview this morning, Taleb provided his latest thoughts on the central bank, focusing primarily on the Fed's lack of risk management. Taleb contended that the Federal Reserve does not understand the risks of its money printing programs, and that Chairman Bernanke is "risk blind." The inflationary consequences of QE may eventually result in hyperinflation, Talib argued, as he pointed to the rising gold price as an indication of such an outcome. Gold prices are set to rise for a remarkable tenth consecutive year, largely on the back of a weak U.S. dollar policy and a profligate government unable to control its spending.
When asked about former Fed Chairman Alan Greenspan's recent comments that the U.S. is "pursuing a policy of currency weakening," Taleb said that "When I hear Greenspan, I shut down," because he was another one of the "pilots" who steered the economy into the financial crisis. Policymakers should therefore not instill their trust in Bernanke or Greenspan due to their inability to identify and deal with the risks in the financial system prior to 2008.
As for how to prevent the Fed from causing further damage, Taleb noted that the structural issue most plaguing the economy is too much debt. The Black Swan author pointed to the policies of the Obama administration, asserting that "Instead of accepting that we have a risk problem, we have lost money, and you don't double-up with future generations' money either by increasing deficits or debasing the currency…There's no free lunch."
While many agree with Taleb's assessment of the Federal Reserve, these parties are likely to remain disappointed, as Bernanke is set to remain at the Fed's helm for the foreseeable future. As a result, Taleb can continue to look to the gold price, which despite today's decline is immersed in a decade long uptrend, as a barometer of the central bank's inadequacies.
go to
https://sites.google.com/site/goldandsilver2012/gold-price/gold-price-plunges-to-1-369-bernanke-blind
Short URL: http://www.goldalert.com/?p=6746
GOLD PRICE NEWS – The gold price plunged $40.40, to $1,368.60 Friday as the price of gold fell amid broad-based liquidation on Wall Street. The catalyst for the decline in the gold price and the broader stock market stemmed from concerns that China is planning to hike interest rates to tame the nation's rising inflation. The SPDR Gold Trust (GLD), the most liquid proxy in the equity markets for the price of gold, settled lower by $3.97 at $133.69 per share. Silver followed the gold price lower, tumbling $1.39 to $26.02 per ounce.
After reaching a new all-time record high of $1,424 this past Tuesday, the gold price closed at the lows of the week, which historically has been a concerning sign for investors. The price of gold ended the five-day session with a $23.49, or 1.7% loss, for only the second decline in the past nine weeks.
While the threat of higher rates presents a headwind for the gold price, the world's most developed economies – the U.S., Europe, and Japan – have all pledged to keep the money spigots open to fight the ongoing deflationary headwinds facing the global economy. As a result, in spite of this week's sell-off in the gold price, the yellow metal remains higher by 0.8% in November and 25.0% year-to-date.go to
https://sites.google.com/site/goldandsilver2012/gold-price/gold-price-plunges-to-1-369-bernanke-blind
In recent months the Federal Reserve's actions have been widely debated among both investors and economists with many strongly condemning the Fed's second round of quantitative easing (QE). One of the harshest critics of the central bank, and Fed Chairman Ben Bernanke in particular, has been Nassim Taleb, NYU professor and author of the best-selling book "The Black Swan."go to
https://sites.google.com/site/goldandsilver2012/gold-price/gold-price-plunges-to-1-369-bernanke-blind
In a Bloomberg interview this morning, Taleb provided his latest thoughts on the central bank, focusing primarily on the Fed's lack of risk management. Taleb contended that the Federal Reserve does not understand the risks of its money printing programs, and that Chairman Bernanke is "risk blind." The inflationary consequences of QE may eventually result in hyperinflation, Talib argued, as he pointed to the rising gold price as an indication of such an outcome. Gold prices are set to rise for a remarkable tenth consecutive year, largely on the back of a weak U.S. dollar policy and a profligate government unable to control its spending.
When asked about former Fed Chairman Alan Greenspan's recent comments that the U.S. is "pursuing a policy of currency weakening," Taleb said that "When I hear Greenspan, I shut down," because he was another one of the "pilots" who steered the economy into the financial crisis. Policymakers should therefore not instill their trust in Bernanke or Greenspan due to their inability to identify and deal with the risks in the financial system prior to 2008.
As for how to prevent the Fed from causing further damage, Taleb noted that the structural issue most plaguing the economy is too much debt. The Black Swan author pointed to the policies of the Obama administration, asserting that "Instead of accepting that we have a risk problem, we have lost money, and you don't double-up with future generations' money either by increasing deficits or debasing the currency…There's no free lunch."
While many agree with Taleb's assessment of the Federal Reserve, these parties are likely to remain disappointed, as Bernanke is set to remain at the Fed's helm for the foreseeable future. As a result, Taleb can continue to look to the gold price, which despite today's decline is immersed in a decade long uptrend, as a barometer of the central bank's inadequacies.
go to
https://sites.google.com/site/goldandsilver2012/gold-price/gold-price-plunges-to-1-369-bernanke-blind
Short URL: http://www.goldalert.com/?p=6746
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