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Thread: FED QE2 money printing = record Gold price, DOW up, oil up, commodities up

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    Banned Melonie's Avatar
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    Default FED QE2 money printing = record Gold price, DOW up, oil up, commodities up

    (snip)SAN FRANCISCO (MarketWatch) -- Gold futures rallied to a record over $1,380 an ounce Thursday, and silver futures rocketed more than 6%, after investors piled into precious metals as a hedge against the sinking U.S. dollar after the Federal Reserve rolled out a new, $600 billion of extraordinary stimulus measures to prevent deflation. Gold for December delivery closed up $45.50, or 3.4%, to $1,383.10 an ounce. Silver for December delivery surged $1.61, or 6.6%, to $26.04 an ounce. December copper rose 13 cents, or 3.4%, to $3.91 a pound."(snip)


    (snip)NEW YORK (WSJ)—Stocks rallied Thursday to their highest level since September 2008 as investors applauded the Federal Reserve's latest effort to stimulate the struggling economy. The Dow Jones Industrial Average closed up 219.71 points, or 1.96%, to 11434.84, its highest closing level since just before Lehman Brothers collapsed. Dow components Bank of America, JPMorgan and Caterpillar fueled the blue chips higher.

    The Standard & Poor's 500-stock index jumped 23.09 points, or 1.93%, to 1221.05. Financials were the S&P 500's biggest gaining sector after The Wall Street Journal reported the Federal Reserve is expected soon to start allowing healthy banks with strong capital levels to increase their dividend payments."(snip)


    (snip)Breitbart - World oil prices hit fresh six-month peaks on Thursday as the dollar slumped on the back of the US Federal Reserve's new huge stimulus package aimed at boosting the American economy.

    Brent North Sea crude for delivery in December delivery rallied as high as 87.59 dollars, reaching a level last seen on May 4. It later stood at 87.46, up 1.08 dollars from Wednesday's close.

    New York's main contract, light sweet crude for December, surged to a similar high point at 86.05 dollars, before pulling back to 85.88, up 1.19 dollars.

    The dollar tumbled on Thursday after the Fed announced that it would launch a new asset-buying plan, or quantitative easing (QE), worth 600 billion dollars, to bolster the nation's sluggish economic recovery.

    In reaction, the European single currency soared to 1.4264 dollars, reaching the highest level since January 20, as traders fretted that the Fed policy could water down the value of the US unit.

    "The Fed announced yesterday evening that it would be buying up more US treasuries. The much weaker US dollar as a result is now giving impetus to commodity prices," said Commerzbank analyst Carsten Fritsch. "(snip)


    (snip)"BLOOMBERG - The S&P GSCI index of 24 commodities climbed to the highest level since October 2008. Silver futures surged 6.6 percent to $26.043 an ounce on the Comex in New York and earlier topped $26 for the first time since 1980. Gold jumped to a record $1,391.80. Cotton for December delivery surged 3.6 percent percent to an all-time high in New York. Prices have more than doubled in the past 12 months, reaching the highest since the fiber began trading 140 years ago. Crude oil advanced 2.1 percent to $86.49 a barrel. Raw sugar jumped 5 percent and earlier touched 31.81 cents, the highest price since 1981. "(snip)


    I guess your perspective on whether or not QE2 is a welcome development depends on whether you are a (rich) investor who will directly benefit from rising Wall St. bank stock dividend increases and gold prices, or a (poor) US worker with few investments who will soon be paying much higher prices for food, gasoline, clothing etc. while your paycheck stays the same.

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    Banned Eric Stoner's Avatar
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    Default Re: FED QE2 money printing = record Gold price, DOW up, oil up, commodities up

    Only two words need be said : "Arthur Burns".

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    Banned Melonie's Avatar
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    Default Re: FED QE2 money printing = record Gold price, DOW up, oil up, commodities up

    ^^^ indeed ! The 'gold foil hat' crowd shares that opinion as well ...

    (snip)"Market Down Only 1.5% Priced In Gold

    The market as we know it, is now finished. As of last night, stocks are nothing but a policy tool, controlled exclusively, and very much legally and with no legislative control, by Ben Bernanke. The Federal Reserve has rendered the economy irrelevant. We hope America enjoys paying $10 for a loaf of bread shortly.

    In the meantime, the market closed down 1.5% priced in gold, which closed $7 dollars short of $1,400. Next stop: $10,000. (snip)

    from


    Of course the Austrians are offering the opinion that (paraphrased)

    A. the FED's intent here is to attempt to reignite 'wealth effect' spending by well-to-do Americans who will see their stocks / bonds / 401k's appear to rise in value so that said 'wealth effect' spending will create genuine economic growth

    B. while many Americans are US dollar centric to the point of ignoring immediate US dollar exchange rate effects, they are not so stupid as to accept the FED's intentional delusion that more US dollars in circulation ( or higher US dollar denominated stock / bond / gold prices ) actually equals more 'wealth'.


    From my own perspective, my gold miner stocks were up major today, and my Swiss Francs are side-stepping the US dollar's 'purchasing power' loss at least.

    ~
    Last edited by Melonie; 11-04-2010 at 03:09 PM.

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