Powell Doesn't Understand Economics

Powell doesn't understand economics. Low interest rates are only good for the economy if they naturally result from high savings and low debt. If they result from Federal Reserve manipulation, they are extremely harmful. Like any government price control, it results in adverse imbalances.

The Fed's misguided monetary policy will create the condition where any cure for an inflation rate that greatly exceeds its 2% target will be fatal to the economy. If the inflation disease doesn't kill the economy, the cure will. The question is, which poison will the Fed pick?

The Wrong Road To Economic Recovery

The economy doesn't need more consumption, it needs more production. Productive employment will stimulate the economy. Printing money and distributing it to non-productive people will not. It will only result in larger trade deficits, a weaker dollar, and higher consumer prices.

The Reasons Behind The Gold Sell-Off

Gold is selling off because traders now believe the Federal Reserve will not be as easy as once expected. While Fed policy is more likely to be much easier than expected, if traders are correct this development would be far more bearish for the stock market than it is for the gold market.

The lack of conviction gold stock investors have in the trade really is amazing. Despite the most positive fundamentals ever for gold, fear is far more pervasive than greed. Imagine what the market will look like when larger gold stock investors actually turn bullish on gold. 

Related trading instruments: SPDR Gold Trust ETF (GLD),Market Vectors Gold Miners ETF (GDX)