{"id":163213,"date":"2020-01-13T16:04:34","date_gmt":"2020-01-13T21:04:34","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=163213"},"modified":"2020-01-13T12:20:28","modified_gmt":"2020-01-13T17:20:28","slug":"fighting-the-fed-and-the-crooked-banks-by-holding-gold","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/01\/fighting-the-fed-and-the-crooked-banks-by-holding-gold\/","title":{"rendered":"Fighting the Fed (and the Crooked Banks) by Holding Gold"},"content":{"rendered":"
January 13, 2020<\/div>
\r\n<\/div><\/div>

By Money Metals News Service<\/b><\/p>\n

Market forecaster Martin Zweig famously warned investors against underestimating the power of the Federal Reserve Bank to control markets. He coined the phrase \u201cDon\u2019t fight the Fed\u201d back in the 80\u2019s. Precious metals investors are wondering if this is still good advice.<\/p>\n

\"Don't<\/p>\n

On one hand, it is pretty hard to argue with that bit of wisdom.<\/p>\n

The Fed Zweig was referencing had begun taking a more overt role in markets, using interest rates as a tool for managing the economy.<\/p>\n

Paul Volcker dramatically raised interest rates to put price inflation from the late 1970\u2019s back under control.<\/p>\n

Zweig hailed from an era of less irresponsible central bankers. He expected them to use their immense power in rational ways.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Today he might be disturbed by just how vast the powers of the central bank have become. Officials there recognize no limits on their authority. They buy stocks, spearhead bank bailouts, monetize federal debt, and act as a lender of last resort in the repo markets.<\/p>\n

The Fed\u2019s balance sheet exploded to 4 trillion dollars over the past decade. It is stuffed with assets few others wanted to buy; U.S. debt with very low yields, dodgy mortgage securities and who knows what else.<\/p>\n

Officials there have unlimited power, but the way they use it undermines \u2013 not inspires \u2013 confidence. The feeble attempt to normalize interest rates and unload some of the junk on their balance sheet failed a year ago when the stimulus addicted equity markets went into withdrawal.<\/p>\n

Past assurances about being able to throttle back when the economy recovered proved to be worthless. They are back to spiking the punch bowl, and investors have to worry about how crazy things will get this time around.<\/p>\n

Fed bankers won\u2019t give an honest accounting for their extraordinary intervention in the repo markets, but it smells like trouble. If it spreads, rates will be headed back toward zero.<\/p>\n

They talk openly about even more bizarre and extreme policies, including negative interest rates, as tools to combat an economic slowdown.<\/p>\n

The power of the Fed isn\u2019t the only consideration when deciding how to invest. It is just as important to think about who wields that power and how well they do it.<\/p>\n

For the most part, today\u2019s central bankers lack wisdom or principles. They have Politburo-like arrogance in their ability to centrally plan the economy. And they lack Volcker\u2019s tolerance for pain which explains why the bubbles they blow just keep getting bigger and more dangerous.<\/p>\n

Fighting the Fed may be a bad idea. But so is climbing on board with the people running policy there. We suggest the best plan is to try and get out of their way. That is what an investment in physical gold and silver is really about.<\/p>\n

\n

The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Money Metals News Service Market forecaster Martin Zweig famously warned investors against underestimating the power of the Federal Reserve Bank to control markets. He coined the phrase \u201cDon\u2019t fight the Fed\u201d back in the 80\u2019s. Precious metals investors are wondering if this is still good advice. On one hand, it is pretty hard to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-163213","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/163213","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=163213"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/163213\/revisions"}],"predecessor-version":[{"id":163216,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/163213\/revisions\/163216"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=163213"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=163213"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=163213"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}