The federal government has simply made too many promises that in total cannot be fulfilled. It is for this reason that everybody should be accumulating physical gold and silver. It is to be ready for the federal government’s day of reckoning, much like the mini-reckoning that occurred in 2008. It will be different the next time, though, because there will be no one who can bail out the federal government. But let’s move away from the big picture and go back to focusing on the week ahead.
Will gold and silver drop again this week because of the economic news and FOMC announcement? We’ll see, but whatever noise impacts gold and silver this week will soon pass.
The plain fact is that gold and silver are undervalued, and consequently the tide already has turned in their favor. The uptrend in gold and silver has now been underway for 13 months. It was June 2013 when the precious metals made their low, and for months gold and silver have been climbing the proverbial ‘wall of worry’ that is the characteristic of all new bull markets.
The Fed’s balance sheet hit a new milestone last week. For the first time ever, its assets have hit a new record by expanding to more than $4.4 trillion. That means a lot of inflation is in the pipeline.
Anyway, if we use history as a guide, these economic reports and FOMC announcements in the past have repeatedly been met with intervention by central planners in an attempt to keep the price of gold and silver under their thumb. No Fed official wants to be embarrassed by a rising gold price when testifying before Congress, which explains why the gold price dropped during Fed Chairwoman Janet Yellen’s testimony two weeks ago.
Similarly, no Fed official wants to admit that six years of unprecedented money printing has failed to produce a meaningful economic recovery because it would expose the lie that central planners and their money printing are beneficial.
Fortunately, in addition to more people understanding that the gold price is manipulated, more people are questioning the role of the Fed and starting to understand that the Fed serves the banks and the federal government, not the American people, by printing money to perpetuate the illusion that an over-leveraged federal government is solvent when in fact it is not.
