No new action from Ben/Europe/Gold

“Federal Reserve Chairman Ben Bernanke is unlikely to use his speech Friday at the central bank’s annual Jackson Hole, Wy, conclave to unveil new efforts to bolster the US economy, despite financial markets’ lingering hopes that he will,” said the WSJ today. While no specific sources were cited, it’s likely no coincidence that this was written the day before Bernanke’s speech. Jackson Hole is not the new forum for an FOMC meeting. Last year was an outlier and as I’ve stated already, the Aug 9th FOMC meeting was the ’11 version of ’10 Jackson Hole and they won’t add to it just 2 1/2 weeks later. European bank stocks are rallying after Credit Agricole reported better than expected earnings and the iTraxx European financial index CDS is falling 10 bps to 245 bps, a 3 day low. One comment on gold to put the amazing move we’ve seen since 1999 into perspective. The rally to $1900 a few days ago from the 1999 low of $253 is a rise of 7.5 times. The 1970’s bull market sent gold from $35 to $850, a gain of 24 times. Gold of late was well overdue for a sharp drop after its recent parabolic move but this 11 year bull market is not over and understand that gold is not in a bubble, global paper money creation is.

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