Someone should give Ben Bernanke (Chairman of The US Federal Reserve) a conductors stick.
When everyone thought a hint of QE3 was coming back in June, we predicted an extension of operation twist, and that is exactly what happened.
Now, once again everyone is expecting a QE announcement tomorrow because of the Fed minutes released on August 22nd, which can be read here;
Just as an orchestra conductor controls the volume and intensity of the brass, percussion and woodwinds, so goes Bernanke with stats, data and reports. The beige book was released today and can be read here;
Now the beige book is merely a collection of reports for the districts of the Fed, and not the opinion of the Fed itself. From this however, we feel the rehtoric will be the same concerning stimulus coming out of Bernankes mouth. Moderate growth, not warranting any action now as everything is within the dual mandate at this time, however there are some concerning points regarding our growth and employment as well as EU issues and the Fed is prepared to act with all available tools if needed.
We’re thinking there will be enough verbage in there for someone to find a justifiable reason to assume QE is coming, and it very well could be during the final meeting that coincides with a press conference before the election on September 12th and 13th.
Metals were driven upward with force on the assumption of QE, they are starting to retract as data is being released that will allow Bernanke not to do the third round of QE just yet. The preassure cooker that is the precious metals market has been building and with recent activity, assumed activity it is evident that it is ready to blow.
It no longer seems to be a matter of “if” gold and silver go higher, rather a question of when…
Return tomorrow at 10am ET 7am pst. If we do not have a live stream of Bernankes Jackson Hole Speech, we will have live updates.