It’s this type of Keynesian economics that have gone too far, for too long, and that continue to plunge our country into record debt. It’s also a wonder why gold isn’t trading at $2,000 an ounce today.
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New York, NY (PRWEB) November 10, 2011
Profit Confidential, the popular stock market and economic e-letter, says that gold bullion should be trading at the $2,000-per-ounce mark given the overly generous monetary policies of today.
According to Profit Confidential, “The Fed has kept short-term interest rates down for years and has told us that the Federal Funds Rate will stay near or at zero until mid-2013…short-term interest rates to stay at zero for two more years! The Fed has purchased $2.3 trillion in debt, including government treasuries, in the period from December 2008 to June 2011 (two rounds of quantitative easing) and swapped $400 billion in its short-term securities holdings for long-term debt in order to lower long-term interest rates.”
Profit Confidential says that, in doing the above, the Fed has significantly increased the money supply. A total of $2.3 trillion has been added to the Fed’s balance sheet. That doesn’t happen without money being created. And the more money created, the less the U.S. dollar buys, the more inflation rises, and the higher the price of gold bullion goes. On November 2, 2011, after the Federal Reserve concluded its regularly scheduled two-day Federal Open Market Committee meeting, Fed Chairman Ben Bernanke said that the Fed may look at buying more mortgage-backed securities, if the economic situation warranted, to loosen up the housing market.
Michael Lombardi, lead contributor to Profit Confidential, writes, “The government already owns Freddie Mac and Fannie Mae, which jointly own or guarantee half the residential mortgages in the U.S. With the Fed buying more mortgage-backed securities, the government and Fed get more entrenched in the residential housing mortgage market. I doubt George Washington ever envisioned a time when the government would own guaranteed loans on homes. This is not what the government was set up to do. It’s this type of Keynesian economics that have gone too far, for too long, and that continue to plunge our country into record debt. It’s also a wonder why gold isn’t trading at $2,000 an ounce today.”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%. To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, the stock market, the U.S. dollar, the euro, interest rates, and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.
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