There’s been quite a bit of talk these past couple of years about the Federal Reserve tightening monetary policy due to an economic recovery finally arriving that I’m going to have to agree with “crash prophet” and Euro Pacific Capital CEO/Chief Global Strategist Peter Schiff on this.
The Fed is bluffing.
Unless Fed officials are now starting to worry that growing their balance sheet is not in their best interest anymore.
Schiff, who correctly-called the 2008 global economic crisis, wrote in the March issue of his Gold Letter that was published Friday:
Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: “We could exit without ever selling by letting it run off.” What Bernanke means here is that the Fed could simply hold its Treasuries and agency bonds until they mature, at which point the government would then be forced to pay the Fed back the principal amount. Through this process, the Fed’s unprecedented and inflationary position will be gradually and placidly unwound.
Growing rumors last month of a potential “tightening” of monetary policy – seemingly confirmed by the Fed minutes released on Feb. 20th – have spooked the precious metals markets, leading to a 5.8% correction in gold and 10.2% in silver.
However, these fears are preposterous on two counts…
You can read the entire article (“The Fed’s Tightening Pipe Dream”) on the Euro Pacific Precious Metals website here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
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