Servias Ministries Blog

The Federal Reserve has painted itself into a corner.  Can you reduce interest rates to a negative level?  The 10 year bond yield has increased and that worries Bernanke and company.  There have been some resignations at the Fed and at the same time Harry Reid is trying to make it easier to get President Obama’s appointees approved through the Senate.  See: http://abcnews.go.com/blogs/politics/2013/07/harry-reid-vows-to-break-filibuster-rule-in-this-new-era/

I do agree with Reid, this is a new era coming but I have a different view of how it will look.  The U.S. is desperately trying to keep the Dollar in demand by initiating trade agreements that are dollar-based, mainly with Europe.  In the meantime, the Kings of the East are putting together a financial infrastructure that eliminates the Dollar as the world reserve currency.  They have had enough of the U.S. exporting devaluation to their shores.

I suspect that we may have one more attempt at a smackdown of gold and silver prices before the bottom of prices is in.  The problem in another smackdown is that most of the weak sellers of gold and silver have already exited the market.  The current buyers are longer term investors who are looking for bargains and are not scared by a price drop.  On the contrary, they hope they get another rock-bottom buying opportunity.  The current prices of gold and silver have put stress on the mining companies.  I am focusing on those companies with zero debt and cash in the bank.  Some of the senior producers will come out with ugly numbers this quarter as they cut away any excess and take the loss.  This should provide a stronger sector in coming quarters.

Bernanke publicly eluded to the fact that the unemployment numbers may be understated.  I wonder if he is now a subscriber to John Williams’ www.shadowstats.com?  We’ve been reporting this reality for some time.  What kind of shape is the economy in?  The following graph from Zero Hedge may tell the story:

This entry was posted on Tuesday, July 16th, 2013 at 7:52 am and is filed under Biblical Economics & Money. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.