Bloomberg News admitted that it is aware of the Fed’s “hidden”
mandate to control the price of gold when it published an article last
Sunday titled, “Yellen Can’t Halt Trump Gold Rally That Funds Bet
Against” –
Bloomberg/Yellen/Gold.
That title, combined with the content of the article, implied that
the journalists and editors at Bloomberg are aware that the Fed actively
manipulates the price of gold. It’s hard to know if this admission was
put forth intentionally or unwittingly. But the headline outright
acknowledges that the Fed’s goal with respect to the price of gold is to
prevent it from moving higher. The Fed’s current tool for this purpose
is the “good cop/bad cop” routine played out on a daily basis between
the Fed Governors who purport the need for more interest rate hikes and
the Fed Heads who advocate waiting until the economy improves.
Lost in the smoke of Orwellian propaganda is the absurd notion that
the two “rate hikes” were a mere quarter of a percentage point in
magnitude. This can hardly be described as “raising interest rates.” It
certainly is not even remotely close to the concept of “interest rate
normalization,” whatever that is supposed to mean. In mid-2007, about a
year before the financial system nearly collapsed, the Fed Funds rate
was 5.25%. A little more than a year later it had been dropped to near
zero.
If the financial analyst “Einsteins” define “rate normalization” as
the 5.25% level in 2007, it will take about about 20 years using the
speed of rate hikes by the Fed over the last two years. On the other
hand, going back to 1954, which is as far back as the Fed’s database
takes us for the Fed funds rate, the median level for the Fed Funds rate
is somewhere around 7%. Is
THAT level how one would define
“normalized rates?” You can do the math on how long it would take
thereby to achieve “normalized interest rates” if 7% is the goal.
Since mid-December 2016, when gold appears to have bottomed out from
the manipulated price “correction” that began in August, gold has been
trading in defiance of the Fed’s attempts at price control. Yesterday’s
(Wednesday, Feb 22nd) trading action is point in case. Gold was slammed
for about $9 right after the paper trading market on the Comex floored
commenced. This is standard operating procedure. But about 5 1/2 hours
later, when the Fed released the minutes from its last meeting, gold
spiked up and reclaimed the full $9 price take-down. Today gold has
soared another $16.
At the Shadow of Truth, we suspect both Yellen and the editorial
staff at Bloomberg News are mumbling to themselves. In today’s episode,
we discuss the trading action in gold and the potential more interest
rate hikes this year:
 
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Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
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The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
