Twin traps for the FED.

FED officials are talking about how the economy has gotten stronger and how it is ready for an increase in the interest rate. If you look at the economic numbers you wonder what sort of hallucinogen these people are using. So, what gives?


The FED is trying to talk gold down. That's the long and short of it. Talk of a rate rise lowers gold.


The FED has made two traps for itself. The first trap is the perception of a good economy in the US. That is centered on the Stock Market being up. Low interest rates, mergers and acquisitions brought that about. Even talk about raising rates threatens to crash the Market. And that is the trap. If the FED talks about a rate rise (let alone actually doing it) it will crash the Market AND THE PERCEPTION OF A RISING ECONOMY. Just before the election. Will the FED do it?


The second trap is that low yields in the West forced those seeking higher yields to invest in emerging markets. If the Dollar goes higher, the emerging markets will tank, because their debts will have to be paid in US Dollars. That is a huge threat to financial institutions that made loans that propped up the emerging markets.


So, what can the FED do? It can continue with the low rates which will stimulate gold prices. Or, it will try to have another stimulus program that will also raise gold prices. FED officials think that rising gold and commodity prices will lead to serious inflation. So, they don't know what to do. That comes from manipulating Markets.