Does anyone else find this slightly amusing?
All of the hand-wringing and angst brought about by the FOMC meeting turned out to be wasted energy. Oh, there are several, interesting nuggets you need to consider but let's look at the gold price action first.
Heading into the Fedlines at 12:30 EDT, we were all wondering what was going to happen to gold (and silver) prices. Would they rise on some kind of QE announcement? Would they fall as they have nearly every time The Bernank has spoken in 2012? The answer to both is: Yes! And that's the funny part.
You've now read countless entries of mine where I've lamented the utter lack of participation in the metals pits, post MFing Global. The only entities left trading are Cartel monkeys and HFT algos. Because of this, we are stuck in an environment where The Cartel can very efficiently "game" the mindless spec computers. We saw this done again today.
Again the pattern for 2012 has been: When The Bernank talks, the metals get sold and the specs (both long and short) get fleeced. Usually, this plays out over a few days. Today, this played out over a few hours. It went like this:
- When the Fedlines hit the wires, gold was $1606. Over the next 6 or 7 minutes, it was hit for $15 and fell to $1591. Spec longs were crushed as their sell stops were hit.
- For the next 90 minutes, gold rallied $30 from $1591 to $1621. Spec shorts were crushed as their buy stops were hit, especially in one, joyous 4-minute interval were gold jumped over $15.
- Then The Bernank took the podium and began speaking. What happened? Well, of course gold was hit for $15 and fell from $1621 back to $1606 over the next 45 minutes.
And thus the title of today's blog entry. The net result is NOTHING. The only ones making any money continue to be The Cartel. Spec long = LOSER. Spec short = LOSER. The non-event of the Fed non-announcement is simply used as cover for The Gold Cartel to game price back and forth, thereby lining their pockets (and increasing their bonus pools) at the expense of the dumb money.
Continuing with the theme of "Net-Net Nothing", today's fun-and-games had ZERO IMPACT on the face of the charts. Gold and silver continue to be rangebound. Silver is particularly quiet and this will likely continue. The lack of volatility is bleeding premium from the July options and you almost have to expect this to continue through option expiry next week. Absent some unforeseen headlines, gold will likely remain below for a few more days, as well.
Back to The Fed. What did they actually say today? It wasn't as bland as LIESman would have you believe.
- They confirmed that they will maintain "extraordinarily low interest rates (ZIRP) through 2014". Why doesn't anyone ever talk about this? That's two and a half years from now! A minimum of 2.5 more years of negative, real interest rates! And how can they claim that, suddenly, beginning in 2015, things will get better and rates will go up? That's preposterous! No one can tell you what will happen next week, let alone 3 years from now but everyone just brushes aside the "ZIRP to 2015" stuff like it's nothing.
- They also lowered their 2012 GDP forecast (which they just made in April) from 2.65% to 2.15%. That's a 20% drop in expectations over the past 60 days. What changed?
- They also stated that they expect the BLSBS numbers to stay right here at 8.1 to 8.2%. This is also a change for the worse since April. Again, what has changed?
Additionally, the next FOMC meeting is 7/31-8/1 so we get to go through all of this again in just 6 short weeks. Hooray! But seriously, that meeting will be interesting. Besides having the June BLSBS data to consider, they'll also have the July data as it will be due to be made public on 8/3. Again, the next FOMC meeting will be the one to watch. Until then...well, we'll see.
Just a couple of other things for you. Two of our pals have released new articles over the past 24 hours. Jim Quinn hits us with a two-parter:
and Mike Krieger uncovered this very interesting video from one of our Esteemed Leader's former allies. Pretty interesting stuff. ( http://libertyblitzkrieg.com/2012/06/19/harvard-law-professor-demolishes-obama/) Here's the actual video. Dude blasts Obama pretty hard and he's a Democrat! Pretty funny.
That's it for now. I hope you survived the day. I hope you're ready for tomorrow as who knows what it holds.