What’s In A Word?

Federal Reserve
Federal Reserve HQ
The Fed was broadly expected to drop the word “patient” from their FOMC meeting minutes to be released today, March 18 2015. This was supposed to send gold and silver prices tumbling even more.

While Ms. Yellen did remove the word “patient”, as in the Fed will patiently wait until the economy looks the way they want before they start raising interest rates, the Fed did add a whole bunch of other words tamping down expectations of a rate increase in 2015.

From the Fed Committee:

“The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”

Perhaps the Fed actually read some other words about the economy like “unemployment rate farce”, and “continuing low labor participation rate”, “what inflation?”.  But then again, what is the Fed supposed to do.  Now days, they can cause the rise and fall of fortunes and societies with just a few words.

On the news that the Fed decided to break out their thesaurus and replace “patient” with “for some time” and “rate below levels … normal”, gold and silver prices rallied as the expectation is that low rate levels will weaken the US dollar compared to other global currencies.  Weaker dollar leads to higher precious metals prices, all else being equal.

If you are a precious metals trader, and got caught out of position, the words you might have used today were “Oh …”,  well I can’t repeat them on a family blog.

If you are a long term investor, with your assets and risk allocated properly, then the word you probably used today after the FOMC announcement is  a hearty “meh”.

If you are not a long term investor and would like to be, you can find some resources on this web site like a huge directory of precious metals dealers, reviews, articles on gold and silver investing, and information about silver coins and bullion.

Leave a Comment