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Look no further than this week’s gold and silver prices to learn what the world thinks about the Fed’s report and Bernanke’s grand standing press conference.

May 1, 2011 – Look no further than this week’s gold and silver prices to learn what the world thinks about the Fed’s report and Bernanke’s grand standing press conference.

The Fed’s announced policy remains unchanged, and all indications are that it will continue for at least three months. That is singularly inexplicable, but completely expected.

While we pursue the cheap dollar fantasy the other, more responsible central banks continue to call for austerity as they tighten monetary policy. It is not the least bit coincidental that recovery in those economies has far outpaced our own, in which growth has plodded along at a dismal 2.8% annually. And last quarter it plummeted to 1.8%.

Still, I suppose for Bernanke’s purposes that will do. But even that was largely due to strong exports, which took advantage of the intentionally cheapened dollar. That advantage cannot be sustained, however, as nations everywhere are poised to take defensive action.

How can Bernanke state that “the Federal Reserve believes that a strong and stable dollar is both in American interests and in the interests of the global economy” and then say that he will continue to implement policy that assures a weak and volatile dollar? He must think everyone else is a fool. In truth, at least in America, he has proven to be mostly correct. But the global community is on to the con.

There must be some reason to continue down a path towards hyperinflation, and Bernanke gave his – he recognizes that first and foremost he must deal with the debt because nothing else can be accomplished until the country is solvent. He must also believe that our government is incapable of taking practical and responsible steps to that end. So he has elected to take the quick fix of inflating our debt away.

While the dollar remains the world reserve, it could work. “But there is little indication of a change in policy from either the Fed or Treasury—or in underlying economic conditions—that would alter the currency’s downward course,” says the Wall Street Journal.

It is that realization that is driving gold and silver prices to new levels every day.

Shannon King

Senior Staff Writer – GoldSilver.org

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