And that's likely how it will remain...
As long as Bernanke keeps raising rates the dollar will stay high, and gold will stay low...
It's anybody's guess what oil will do.
Today the market again twisted Bernanke's testimony to meet it's own desire for a "rally."
Essentially, as long as Bernanke stays rational and does not openly curse Wall Street...his testimony can be twisted to meet the Street's "pause" scenario...but at a price.
A weaker dollar and strong gold and stock prices...on continued inflation hopes...
Bonds naturally will drop...
STILL, THERE IS NO EVIDENCE THAT INFLATION IS STOPPING...OR THAT OIL HAS REACHED ANY KIND OF PEAK...
THERE IS NO CLEAR SIGN THAT THE FED IS EVEN CONSIDERING A "PAUSE"...
OTHER THAN TO KEEP REPEATING THAT IT WILL ACT "RATIONALLY" TO THE DATA THAT IS PRESENTED...
BOTTOM LINE:
BERNANKE WILL RAISE RATES AT EVERY MEETING THIS YEAR...UNTIL FED FUNDS REACHES A "RESTING POINT" AT ABOUT 7%....
THEN AND ONLY THEN CAN THE FED PAUSE...AND WATCH OIL, GOLD AND THE DOLLAR TO SEE WHAT'S HAPPENING....
PRESENTLY, RATES ARE STILL WAY, WAY TOO LOW...AND THEY ARE FINANCING AND FUNDING AN ON-GOING BUBBLE ON WALL STREET...ALBEIT A BUBBLE THAT IS STRUGGLING TO FIND IT'S WAY UPWARD...
AND THAT'S THE REAL PROBLEM ISN'T IT... WALL STREET WANTS IT'S BUBBLE BACK...AND BERNANKE DOESN'T KNOW HOW TO TELL THEM THAT THEY CAN'T HAVE IT...!
