Let’s be real… We all know that gold hasn’t been doing its job lately. However, Rich Checkan, President and Co-Founder at Assets Strategies International, told Kitco News that will soon change when the Fed reverses its course on policy tightening and reduces rates. He said inflation would remain high, causing gold prices to reach $2,400 per ounce within the next 12 months. In other news, Treasury Secretary Janet Yellen believes the Fed’s anti-inflation policies will be “successful.” However, James Rickards disagreed, saying they’re doing more damage than good. “They [the Fed] can destroy enough demand to maybe bring inflation down, but only by destroying the economy. And that’s the point. The idea that the Fed can squash inflation without squashing the economy is false.”
The Fed will ‘abandon’ tightening, causing gold to soar higher – Rich Checkan
Gold’s performance has been tumultuous this year, with the war in Ukraine sending the metal above $2,000 per ounce. Recently, however, gold has fallen in price, and is down year-to-date by 7.8 percent.
Spot gold is currently trading at $1,725.
Speaking with Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News, Rich Checkan, President and Co-Founder at Assets Strategies International, said, “people want to know why gold isn’t doing its job. I submit it is… it’s falling in value, but at a much slower rate than other asset classes.”
The S&P 500 is down 16.6 percent year-to-date, and Bitcoin is down by 51 percent over the same period.
Checkan said that what the Federal Reserve does next could send gold soaring to $2,400 per ounce within the next 12 months.
Keep reading, here.
Fox Business/Bradford Betz
Yellen predicts Fed’s anti-inflation policies will be ‘successful,’ after wrongly calling it ‘transitory’
Despite admitting in May she’d been wrong about the path inflation would take, Treasury Secretary Janet Yellen said Sunday she expected the Federal Reserve’s policies to be “successful.”
“The Fed is charged with putting in place policies that will bring inflation down. And I expect them to be successful,” Yellen told anchor Chuck Todd on NBC News’ “Meet the Press,” Sunday after downplaying recession fears.
The Biden administration, including Yellen, previously dismissed concerns about rising costs and said the contributing factors were “transitory.”
“We have in recent months seen some inflation, and we — at least on a year-over-year basis — will continue, I believe through the rest of the year, to see higher inflation rates, maybe around 3 percent,” Treasury Secretary Janet Yellen said about in inflation in early June 2021. “But I personally believe that this represents transitory factors.”
You can read the full article, here.
The Daily Reckoning/James Rickards
The Fed vs. the Economy
Right now, it’s basically a case of the Fed versus the economy. You might say, “Wait a second. Isn’t the Fed supposed to help the economy?”
Well, not exactly. They may want to help the economy, but helping the economy actually isn’t job one. Job one is helping the banks. The Fed was essentially created to prop up the banking system and prevent bank runs.
Everything else it tries to accomplish, such as price stability and maximum employment, comes second.
So it’s not clear that the Fed’s always aligned with the best interests of the economy. People don’t realize that, but it’s important to keep in mind.
Continue reading, here.