With the release of Disney’s latest movie, “Oz, The Great and Powerful,” I caught myself thinking how similar the so-called Wizard of Oz and the Fed really are.
This comparison may see far fetched but think about it, in today’s economy, the role of the wizard is being played by the Federal Reserve Bank. Since its emergency interventions in 2008, the Fed has found itself in the role of savior for the economy from the dark forces of a disruptive Congress caught in a stalemate and a Europe unable to overcome a regional debt crisis.
Like the Wizard who possesses no real magic, the Fed has limited tools to accomplish what it has set out to do. Unable to get to the heart of the economic issues, it has adapted the imperfect tool of quantitative easing, a tool that has been only known to work in more controlled environments. By consistently inflating financial asset prices, the Fed hopes that by causing genuine excitement about a record-setting stock market, it will trigger those holding lots of cash to invest and consume. Unfortunately for the Fed and the economy, spending doesn’t seem to be happening.
So how will this story end? Will the Fed get a happy ending for the economy? Only time will tell.
But in the meantime, we here at GoldWatch encourage you to follow the yellow metal road. Gold is close to $1600 an ounce while the dollar continues to weaken as the Fed’s limited tool of quantitative easing devalues the currency further.
Call Capital Gold Group at (800) 510-9594 and speak with a precious metals expert today about adding physical gold to your portfolio!