Fed week gave us what we expected, a no move by the Fed, something I predicted last December when I said, unlike the Fed who called for 4 more rate increases, this would be a one and done. Here we are in September of 2016 and the Fed said today they “may” do one more rate increase this year.
But here’s the part that I need to explain and what I wrote about in my book Illusions of Wealth; The markets trade on what the Fed does, not on any other mechanism like P/E ratios, valuations, fundamentals. But it also has been trading inverse of the dollar overall too, just like gold has.
Dollar was down big today and gold and the markets were up big.
But all of the data has been negative of late and the Fed sees this. They sit and talk about a 2% inflation target and never attain it so they move the goalposts out a bit and extend the lower rate policy. Maybe, just maybe the economy will grow and GDP increase along with production. Sorry, but I’ll take the other side of that bet.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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