It all comes back to gold. Eric, go back to the House Financial Services Committee hearing this past Wednesday. Here is what Bernanke said on the effects of tightening the so-called monetary easing: ‘I don’t think the Fed can get interest rates up very much because the economy is weak, inflation rates are low … If we were to tighten policy (meaning monetary policy) the economy would tank.’
That should have been the headline story in Thursday’s newspapers around the world. Pick up The Financial Times, The Wall Street Journal, The New York Times, they never mentioned the phrase, ‘If we were to tighten policy, the economy would tank.’ And that’s where it’s going.
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