and headed to $40.00, Feds printing 40 Billion or more every month with no end date, silver will go through the roof.
Well, it is now clear that we’ve entered a new era of central bank policy making in which money printing in both Europe and the U.S. has become open-ended, today’s policy statement from the FOMC (Federal Open Market Committee) indicating that the Federal Reserve will purchase some $40 billion in mortgage backed securities until such time that the U.S. economy improves (that might be a long time).
The Fed also extended its promise to keep short-term interest rates at their freakishly low level of between 0 and 0.25 percent from late-2014 until mid-2015, a decision that is sure to thrill fixed income investors in the world who have already been locked out of CD rates at or near the rate of inflation for years now.
As shown to the right where the last two Fed rate cutting cycles are compared, we’re now at the five year mark since the Bernanke Fed first began slashing interest rates in 2007, about the same mark where rates had been normalized the last time around.
Moreover, if the current low rates extend into 2015 as promised, that would put us beyond the end of the last rate cut/normalization cycle, more fodder for future monetary historians to be sure.
Probably the most important part of this statement is the following in which money printing in excess of the additional $40 billion per month is threatened: