Real Wealth #091 01/31/2007
Fed holds interest rates Gold jumps $6
The Federal Reserve voted to leave the Federal Funds rate, the interest that banks charge each other, at 5.25 percent, where it has been since last June, while once again repeating the central concerns about inflation.
This had been the expectation despite the f
The rate action was supported by a unanimous 11-0 vote of the Federal Reserve Open Committee, the panel of Fed board members in Washington and regional bank presidents who meet eight times a year to set interest rates.
At the previous four meetings, Jeffrey Lacker, the president of the Richmond Fed regional bank, had dissented in favor of a further boost in rates. However, he is not a voting member of the FOMC this year.
The action means that banks' prime lending rate, the benchmark for millions of consumer and business loans, will remain unchanged at 8.25 percent.
Gold quickly jumped on this news and is now trading $652.85 per ounce in the spot market, up over $6.
As we've pointed out, the interest rates are just one of the forces driving gold. The f
As Fari Hamzei pointed out yesterday on the 21st Century Alert Radio Show, "The printing presses are not just running around the clock here in the United States, they're running on over time ALL over the world".
Bottom line: This liquidity is the grease that will eventually drive gold past its historic highs.
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