a small blurb on the AIG craziness & US Financial Maelstrom & the message sent to joe public:
The Federal Reserve moves to self financing by buying tons of US Treasury instruments in a clear message that:
- Inflation = Good
- Deflation = Bad
Therefore:
- Higher price of Gold = Good
- Lower price of Gold = Bad
Which also infers that:
- Higher dollar = Bad
- Lower dollar = Good.
This simple formula seems to be too complex for the talking heads who seem to have a difficult time making simple adjustments to their broadcasts, such as no smiling when reporting the Dow is down 500 points or now looking incredulous when reporting gold isup $1.
Fed quantitative easing via financing themselves put a floor under gold. When you have a floor under a market it will seek the ceiling.
The first floor temporary ceiling is at $1224. After that look to $1650 followed b y Alf’s numbers.
