Open up the flood gates! Janet Yellen, the nominee for chairman of the Federal Reserve, promises more fiscal stimulus as long as the unemployment rate in the U.S. remains above 6.5 percent and the outlook for inflation doesn’t rise above 2.5 percent. Testifying before the Senate Banking Committee in Washington, Yellen said she didn’t believe the Federal Reserve’s monetary policy had produced a stock market bubble, citing traditional measures such as price earnings multiples. (Presumably she’s not including companies like Amazon (AMZN) which currently has a P/E ratio of 141:1).
Gold and gold stocks took it to heart with the price on futures markets rallying close to $20 and spot catching a bid, pushing the price to around $1,290. To say that gold prices have been lethargic lately would be an understatement. Even worse perhaps are the gold equities which are having a hard time catching a bid no matter what the action in the broader gold market. What’s even more frustrating perhaps is the apparent disconnect between burgeoning physical demand for gold and its price on global markets. This disconnect can’t last forever and when the day of reckoning does come, it could be a site to behold.