• 2 days The Federal Reserve and Money...Aspects which are not widely known
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 9 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days Coincidence of EIA Report Delay? - "I had seen it delayed minutes, and a couple of times a few hours, but don’t recall something like this — do others?" asks Javier Blas
  • 22 hours European Parliament Members, Cristian Terhes et al, push back against Totalitarian Digital ID and Carbon Tyranny in Europe.
  • 4 days Demonising fossil fuels has caused major grid problem in Australia
  • 8 days "And this is perhaps the most dangerous kind of government there can be."
  • 3 days "...too many politicians believe things that aren’t true." says Robert Rapier
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 3 days Welcome to Technocracy - The New World Energy Order... "1000s Of Sydney Homes Plunged Into Darkness As Aussie 'Price Cap' Policy Sparks Energy Shortage"
  • 5 days "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 330 days Beware the Left's 'Degrowth' Movement (i.e. why Covid-19 is Good)
  • 7 days ESG Topic - "German Police Raid Deutsche Bank, DWS Over Allegations Of Greenwashing" - ZeroHedge Bloomberg and others
Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Premium Content

The Fed Christmas Present for Gold Bulls

Federal Reserve Chairman, Ben Bernanke, delivered a real blockbuster yesterday in the aftermath of the final Open Market Committee meeting of 2012 - looks like he really wants to end the year with a bang.

Not only will the Fed continue with $40 billion-a-month worth of mortgage-backed securities to supercharge the housing market, it will also conduct an additional $45 billion-a-month of long-term Treasury bonds. The central bank will continue to peg the Federal funds rate at 0%-0.25% until mid 2015.

Most importantly, it will target a specific unemployment rate of 6.5%, 1.2% lower than the last rate, and maintain ultra low rates until then. This is an unprecedented, bold, and historic move. No one can remember the Fed ever targeting employment. The gloves are off.

While QE3 is now only two months old, and financial markets have yet to feel its full impact, it has in effect, launched QE4 right on top of it. Call the duo QE7.
You couldn't imagine any better Christmas gift for hard assets. Gold (GLD) in particular rallied strong. That's because QE7 promises to expand the monetary base far faster than the markets had been discounting. There is no better correlation than the one between a growing monetary base and rising prices for the barbarous relic.

The rest of the hard asset space did just as well. Copper (CU) was up, along with silver (SLV), palladium (PALL), and platinum (PPLT). Oil (USO) saw a healthy $1.50 pop. Combine the Fed action with the possible turnaround in China (FXI) underway, and you could see a sustainable move up in all hard assets, well into next year.

Ben Bernanke's surprise move also raises the floor under stocks. The robust economic data reports we have witnessed in recent months have been given the juice to continue. When I delivered my webinar this morning, I realized that for the first time in years all of the data points on my "Economy" page were colored green. I suspect we'll close 2012 with a run at the highs, and possibly climb just short of 1,600 in the (SPX) sometime in Q1.

Treasury bonds (TLT) were a bit of a quandary. You would think that $45 billion a month of fresh buying at the long end would send prices soaring. Instead, prices dropped and yields rose by five basis points. The market seems to be focusing on the longer-term inflationary impact of the Fed move, rather than the quantity of paper the government is willing to soak up. It certainly makes my prediction of a 3% GDP growth rate for Q4 much more realistic. Could this spell the end of the bond market? Only time will tell. Maybe I wasn't smoking something after all.

By. The Mad Hedge Fund Trader

SPDR Gold Trust Shares 11

First Trust ISE Global Copper

United States Oil Fund 3


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News