Gold edges lower in advance of Fed meeting
‘People need to realize that this Fed is very tentative.’ – Mike Larson, Weiss Ratings

(USAGOLD – 11/2/2021) – Gold edged lower in advance of today’s Fed meeting and tomorrow’s closing statement and press conference. It is down $1.50 at $1794. Silver is down 16¢ at $23.95. As reported yesterday, analysts are up in the air on how the Fed will approach mixed signals in the economy and the instability already roiling global credit markets – symptoms, as we pointed out in the November issue of our newsletter, characteristic of a stagflationary economy.

“There’s going to be a realization in early 2022 that the Fed is not going to be able to be aggressive,” says Weiss Ratings’ Mike Larson in a report posted at the Finbold website, “People need to realize that this Fed is very tentative. It’s a Fed that has a lot of political pressure to favor the employment side of its mandate over inflation. … I don’t think it’s going to be a runaway where you’re talking about $4,000 gold, but you know, $2,200, $2,300 or $2,400, somewhere in that range, I think in sort of a corresponding moving silver, I think it is likely on the table. And again, it’s going to come from the release of that Fed fear, pressure valve, whatever that’s been keeping people from, getting involved.”

Chart of the Day

Federal debt as a percent of GDP
bar chart showing the federal held by the public as a percent of GDP
Sources: St. Louis Federal Reserve [FRED], Office of Management and Budget

Chart note: “Some economists fear that the United States will become stuck in a ‘debt trap,'” writes James McBride and Anshu Siriparu in a Council on Foreign Relations article, “with high debt tamping down growth, which itself leads to more debt. Others, including those who subscribe to the so-called modern monetary theory, say the country can afford to print more money.” The authors project steady growth of the federal debt to 200% of GDP by 2040. As you can see on the chart, it is just under 100% now – a level many economists already see as dangerous.

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