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No Taper: Uncle Ben carries the day
TND Exclusive / By Eric Dubin / 
Market reaction to the Fed’s announcement of no tapering was fast and powerful. US Treasuries are getting a huge “hot money” bid as bond speculators act knowing the Fed has their back. Stocks are rocketing higher. The precious metals complex is roaring higher, with moves in the mining shares strong out of the gate, and continuing to rise. GDX, for example, is up 5.75% and at its intraday high at 2:30, just as the Fed press conference will commence.
You can watch Ben Bernanke speak live by clicking here.
The performance of the economy is clearly worrying the Fed. Giving up on the opportunity to send a signal to placate fears about a bloated balance sheet and distortions in the capital markets from excess liquidity was not an easy. But to some extent, the Fed can actually say that the back-up in long-term interests witnessed over the last few months has been a form of tightening. We’ll see if Bernanke makes that argument in the press conference.
Earlier this week, Larry Summer’s decision to step out of the running for the top job at the Fed gave gold and silver a short-term boost. But “official” management of the sector and fears of tapering by speculators put an end to that bounce rather quickly. It should be noted that whenever there is an announcement that is strongly bullish for precious metals, history shows that the cartel acts to help push prices lower in advance of the announcement. This mutes upside moves.
We’ll return with more analysis later today.
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