Tag Archives: Federal Rerserve

Dawn J. Bennett & Jeff Snider Discuss the Federal Funds Rate Hike

Dawn J. Bennett, host of Financial Myth Busting with Dawn J. Bennett, recently interviewed Jeff Snider on her radio show. Snider is the Head of Global Research for Alhambra Investment Partners and has authored and published several detailed investment reports that clash with the established opinion presented by the media.  In his interview with Dawn J. Bennett, Snider discusses his take on the federal funds rate hike.

On the subject of the rate hike, Snider says he doesn’t think the market is ready for what’s occurring. “I don’t think the market is ready for pretty much anything that’s going on right now. Any small change, and it seems like everybody’s nervous about what that may be. And I think with monetary policy it’s probably that much more amplified given that there’s so much uncertainty about what it might mean as far as accommodation and main stream views of what accommodation actually is or might be,” he explains.

Bennett notes that a policy error might actually end all the bubbles and allow the U.S. to almost reboot the system, and Snider agrees.

“I actually think that what the Federal Reserve actually does is largely irrelevant,” says Snider. “And the Fed doesn’t actually have any direct control over even the money supply. And mostly what they’re doing is just policy communication.”

He continued, “If you look at the Federal funds market itself, it’s a shell of what it used to be. The Federal funds rate for that matter is basically irrelevant. There’s very little volume in Federal funds at all. So when they’re raising or lowering the Federal funds rate, it’s more about trying to signal psychology and market sentiment than anything else. So I don’t think they actually much control over the market.”

Snider suggests that the Federal Reserve needs to let the markets decide what the correct value of money is and where stability is. He says Federal Reserve Chair Janet Yellen must understand that stability is the most important factor here— not just the artificial centralized stability the Feds try to impose, but real monetary stability.

He continued, “We used to talk about things like the strong dollar. The strong dollar had nothing to do with whether it goes up or down, the strong dollar was the fact that the financial system and the economic system were stable enough that nobody went through convertibility and allowed the dollar to remain as the bedrock association of the economy. We don’t have that anymore, in fact everything that the Federal Reserve does or any other central bank does is the opposite of stability. So that’s where it all needs to start. We need to have monetary stability. We don’t need to worry about what the Federal Reserve is debating in each and every policy meeting, that should be the farthest thing from investors’ minds when they think about what they’re doing insofar as their portfolios.”

To view Snider’s complete interview with Dawn J. Bennett, click here.

 

 

 

Gold Exceeds Its 15-Month High

shutterstock_186030554Gold recently exceeded its 15-month high of $1300. The last time gold broke surpassed that height was on September 29, 2010. According to financial analyst Dawn J. Bennett, there is enough momentum for the metal’s value to keep going up. On Monday, May 2, RBC Capital Markets reported the market’s upward trend could push it over $1400.

So, why is gold continuing to increase from its 15-month high? Dawn Bennett believes the answer is simple:

“Investors are seeing the truth behind our so-called recovery, which is that it’s just not a recovery,” says Bennett. “They are acknowledging the signs that we may be on the brink of an even greater collapse, despite the words coming from media pundits, government stuffed shirts, and the Federal Reserve. And in the face of deranged markets, the draw of gold is clear. Gold and silver have held many roles over history, but one significant one has always been as a hedge against turbulent markets.”

She continued, “These days, the role of gold as a currency, competing against the dollar, the euro, the yen, the yuan, is coming back into focus as well: there is a gold-backed cryptocurrency (think Bitcoin) called the Hayek, and the IMF is backing some loans with gold as security against fiat currency.”

Though the media reports the U.S. is outside of the meltdown in “global markets”, that is not the case. Dawn Bennett notes that central banks, including the Federal Reserve, have inflated asset bubbles through credit, housing, and equity manipulations. Billions of dollars have been borrowed by U.S. corporations at barely 1%, so they can buy back shares of their own stock. This is responsible for almost 50% of the stock market’s recent increases. Not to mention, the U.S. consumes more than it produces and is trillions and trillions of dollars in debt and unfunded liabilities.

Dawn J. Bennett believes gold and silver are in a unique position at this time. While they can be used as currency, wealth, and a hedge bet, they can also serve as insurance, says Bennett. This means insurance against loss of wealth, potential violent turbulence in collapsing markets, and fiscally foolish governments.

“And as with any kind of insurance, you can buy it and hope never to need it. Now is the time to do the research and search for opportunities and protective strategies,” Bennett explains. “If you do your homework and can be comfortable with the fact that gold and silver can be volatile, consider putting 5 to 10% of your portfolio in gold and silver coins, or other investments in this historic and lasting asset.