We’re all waiting for the Fed announcement shortly after 2 pm today, where it is widely expected that the Fed will cut its benchmark interest rate in half to 50 basis points. According to Bloomberg, with Fed rates at zero, Fed Chairman Ben Bernanke will then move on to using the Fed’s balance sheet as the key tool for monetary policy. Options include purchasing Treasuries to inject more cash into the economy.
But where is all this money going to come from? As a result of all the bailouts for banks, automakers and other new federal outlays, our nation’s budget deficit is expected to reach $1 TRILLION in 2009. And that DOESN’T include the new, $1 trillion stimulus plan that Barack Obama’s economic team is reportedly working on.
We are seeing paper money debased. And that looks like a good time to own gold to me.
Here is other news I’m reading …
Big Oil Projects Put in Jeopardy by Fall in Prices
From the plains of North Dakota to the deep waters of Brazil, dozens of major oil and gas projects have been suspended or canceled in recent weeks as companies scramble to adjust to the collapse in energy markets.
Russian Industrial Production Shrinks Most Since Economic Collapse of 1998 Russian industrial production shrank the most since the economic collapse of 1998 in November as the global slowdown reduced demand for steel, pipes and fertilizers, pushing the nation to the brink of recession.
Venezuela Wants OPEC to Cut Oil Production by Up to 2 Million Barrels/Day Venezuelan Oil Minister Rafael Ramirez said he wants a cut in OPEC production of between 1 million and 2 million barrels a day at this week’s meeting.
Gold Declines After Rally Entices Selling; Dollar Arrests Slide vs Euro Gold fell in London, ending a six-day rally, as an 11 percent gain in the period spurred some investors to sell and as the dollar halted its slide, reducing bullion’s appeal as an alternative investment.
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