No Hints At QE Whatever, But Fed’s No. 2 Vice Chair For Stimulus
It’s been clear for months that the Federal Reserve, when it comes to Bernanke speeches, is very cautious in its choice of words. Bernanke has become a symbol in the world for currency devaluation and therefore rising gold and silver prices. If Bernanke were to give a speech wearing a gold or silver tie, just as Greenspan’s ties used to signal markets, the price of precious metals would most likely dramatically rise. And so, when Bernanke speaks, nothing is uttered that would even remotely be bullish for gold and silver and thus bearish for the dollar.
Nonetheless, in the background, in Bernanke’s shadow, the Federal Reserve has aggressively hinted at more quantitative easing. On Wednesday night, for example, Vice Chair Janet Yellen reiterated her opinion that further action by the central bank of the United States could very well be necessary to tickle the depressed U.S. economy.
“An extended period of highly accommodative policy is necessary to combat the persistent headwinds to recovery,” Yellen said Wednesday to the Boston Economic Club Dinner.
“The pace of the current recovery has turned out to be persistently slower than most observers expected,” she added.
Speculation has centered not only on the possibility of further quantitative enemizing, but also on a possible extension of Operation Twist, the Fed’s program of swapping short-term bonds for ones with longer duration to help keep 10-year and 30-year bond yields low.
Yellen pointed out the truism that there is “considerable uncertainty” regarding the impact of these policies going forward, but said that the Federal Reserve has no choice. That, on the precipice of total financial and economic collapse, the only thing the United States can expect is a putting-off -until-later of the suffering.
“There are a number of significant downside risks to the economic outlook, and hence it may well be appropriate to insure against adverse shocks,” she said.
Yellen’s remarks come on the heels of a speech earlier in the day yesterday by Atlanta Fed president Dennis Lockhard, who said that extending Operation Twist is “an option on the table,” as well as a San Francisco president John Williams coming out in support of giving the economy one last quantitative enema, i mean easing. He hinted that such action could include buying up mortgage-backed securities.
So, the illusion persists as paper-demons create a show for the public which does not reflect reality. As Bernanke speaks, the capital-holders send stocks up with large contrived transactions and send gold and silver down via the same methods. On the day Bernanke speaks, it’s a fireworks show for the markets: totally contrived with all the right sparks and blasts to support the illusion.