Yes No Yes, Is The Fed Playing Games?

by Ed LaRue

61manipulateLess than 48 hours after the release of the FOMC report declaring “no taper”, which resulted in a skyrocketing spike in the price of precious metals, St. Louis Fed President James Bullard told Bloomberg that a wind-down of the Fed’s $85 billion monthly bond purchase program could possibly begin in October.

Reaction in gold and silver prices was immediately seen. Spot gold fell 2.4 percent to $1,331.20 an ounce by
3:32 p.m. EDT, Silver fell by 5 percent.

Bullard’s statement today would seem to criss-cross with the statement by the Fed on Wednesday. On that day we were told there were several reasons the tapering would be delayed:

  1. The group is not 100% convinced that the economy can grow without QE3
  2. The group believes that low mortgage rates are important right now
  3. QE3 helps to promote inflation, which could be good for the economy.

The group also said on Wednesday that they will continue to watch the economy for signs that the stimulus can safely end.

In an age of known market hypersensitivity where massive moves happen simply on the statements of one or two men, and after it was noted that the spike in metal prices occurred in the seconds BEFORE the FOMC statement was released on Wednesday, one can’t help but ask, is the Fed playing games?


Ed Larue is an independent writer based in Washington, DC

His blog is at

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