Jim’s Mailbox

Recovery "close to faltering", Fed could act
CIGA Eric

The Fed will act again. Bernanke appears to be listening to the message of the market. A growing list of negative divergences of key intermarket relationships relative to equity prices, new lows unconfirmed by stock prices, illustrates decaying global economic growth.

Copper to Aluminum Ratio:

Chicago Fed Economic Activity Index:

Bill Gross said it best, recession risk overtaking new normal. I agree.

Anyone that believes the Fed’s response will be anything but QE to infinity because gold and the gold shares continue to get pounded, simply fail to recognize the role paper operations, often referred to as open interest flushes, play in trend control.

Headline: Recovery "close to faltering", Fed could act

(Reuters) – The Federal Reserve is prepared to take further steps to help an economic recovery that is "close to faltering", Fed Chairman Ben Bernanke said on Tuesday.

Citing anemic employment, depressed confidence and financial risks from Europe, Bernanke urged lawmakers not to cut spending too quickly in the short term even as they grapple with trimming the long-run budget deficit.

He also made clear the Fed — the U.S. central bank — stands ready to ease monetary conditions further following its launch of a new stimulus measure in September.

Source: reuters.com

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