Yellen nomination fails to fillip metals markets

Despite the buzz about Janet Yellen being selected to head the Fed, so far the gold and silver markets are unimpressed. Over the months leading us to Obama’s selection, there was much speculation that a Yellen appointment would fillip gold and silver prices, but that was not the case.

Prices were expected to rise because Yellen is perceived as being a “dove” on inflation, being less concerned about inflation than employment, which means that the Fed under Yellen would be expected to continue quantitative easing until either employment improves or higher inflation rates become reality.

With prices not responding, it looks as if gold and silver will continue to either build bases or test lower support levels. Dan Norcini, commentator KingWorldNews.com’s Weekly Metals Wrap, seems to think that a test of lower prices is a possibility.

Readers with long-term physicals positions should not attempt to trade such action. There is a real possibility that prices will not go substantially lower, and if they do, there is the possibility that a recovery could come with such rapidity that investors could not re-enter the market at favorable prices.

With Yellen’s nomination, conditions remain ripe for continued quantitative easing, and for big price inflation in the near future.

Janet Yellen was sucked out of academia where only theories about how the economy should work are discussed, not the devastating results of past Fed policies. Since the Fed’s inception, now one hundred years ago, the dollar has lost 95 percent (if not more) of its purchasing power and the US has suffered “economic dislocations,” such as the Great Depression and numerous recessions that the Fed was supposed to prevent.

Further, of utmost importance is that the Federal Reserve System is a central bank, conceived by bankers for the benefit of banks. All the hoopla about the Fed having a “dual mandate” of managing money and credit to achieve maximum employment and stable prices is nothing more than a ruse to conceal what the Fed really does, which is print money for the benefit of the banks.

For the banks, Janet Yellen is the right person, in the right position, at the right time. Just about the same can be said for gold and silver investors.