Thursday, July 31, 2014

FOMC Announcement Nothing New; Fiat Money Still Doesn’t Work

-Ron Paul
Another important day for the financial markets. The Fed two-day meeting ends and a statement is issued. Hundreds of billions of dollars hang in the balance. Each word and comma will have great importance to all the markets. The stocks, bonds, interest rates, the dollar and, of course, gold. The reaction to the release of the Fed’s statement will be instantaneously and quickly discounted. Though the statement by one person, like the chairman of the Fed, should not have so much effect, it does—for a short period of time. Market forces will rule on the long term.

Today’s report offers nothing new. It continues with the policy of obfuscation, it continues to cut QE (quantitative easing) and it keeps interest rates very low to keep Wall Street happy. Today the GDP was up a surprising four percent. Sounds good, but only time will tell if it’s a sign that the economy is growing. Immediate reaction by the big market players is that the dollar will go up, gold will go down, and interest rates will rise and stocks will go down.