Fed Policy And Our Economic Drive

If you missed this train, it’s time its time to consider another mode of transportation

Look at what the Federal Reserve is doing with its monetary policy. We continue to be on quantitative easing, keeping these interest rates artificially low and now we hit a new debt ceiling Nov 3rd when the Federal Government runs out of money once again.

Then who can believe some of the government’s numbers, such as reporting our unemployment rate at 5.1 percent? Really, how can that be if you have a workforce participation rate at 62 percent? (And that 62 percent rate is the lowest in about 40 years.) They have to do those things to create a smoke screen that we have a functioning economy. We continue to see how strong the numbers are on Wall Street, in the beginning of the fourth quarter. But the truth is, Wall Street has become comfortable with lower rates and the indications are the FED will just drag its feet until the pressure becomes too great. Then, and only then, will the FED be forced to raise rates, a “big deal,” quarter percent. So for the time being, Wall Street traders have no trouble jumping on the train hoping it doesn’t run out of fuel at the next station, $1,200 Gold Street. Mother always told me, “Son never stand in front of a roaring freight train,” however this train hasn’t gotten up to speed yet, but it is running. I kind of wonder that $1,200 might be the last stop on this line.

My story will not be complete without mentioning the United States’ favorite metal, the lovely lady named Silver. Silver can see her girlfriend Gold in the distance but needs to take off her loafers and put on some sneakers to catch up or she will miss the party. Silver’s party will be held at the top floor penthouse level at $16.315 and then move to a lower floor for some rest and relaxation.

Have a wonderful weekend.

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.