Fed Commitment To Let Inflation Run Isn't A Promise; It's A Threat

Gold last traded at $1,938 an ounce. Silver at $25.62 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Wednesday on bargain-hunting and continued safe-haven buying, despite a firmer dollar. U.S. stocks rose as shares of the major tech companies recovered some of their steep losses from the previous session.

Zero Hedge==="According to a recent CNBC report, the Federal Reserve is set to make a major commitment to 'ramping up inflation.' According to the report, the Fed will pivot to 'average inflation targeting.' With this strategy 'inflation above the central bank's usual 2% target would be tolerated and even desired.' Practically speaking, the Federal Reserve would not raise interest rates until both its employment and inflation targets are met, meaning the central bank would likely keep interest rates at zero for years....In a nutshell, the Fed simply wants to make sure it's absolutely clear that it isn't even thinking about thinking about raising interest rates...Of course, the Fed doesn't look at the real rate of inflation. It looks at the CPI or some core index within that number. Peter Schiff said they'll likely look at an index that will never get above 4% even if the actual inflation rate is 20 or 30%....The truth of the matter, the Federal Reserve is in a position where it has to make excuses for allowing inflation to run hot because it simply cannot raise interest rates. Even the hint of a rate hike would crash the stock market and likely take the economy down with it. You simply can't raise rates when the entire economy is built on a giant pile of debt. When gold pushed above $2,000 an ounce, a pundit on CNBC declared it wasn't a big deal and predicted the yellow metal will sell off as soon as real interest rates go positive. Schiff said the Fed is telling you that's never going to happen. 'Saying that they're going to commit to more inflation is a threat against the American public. It's a threat against the American economy. They're saying, 'We're going to wipe out the value of your savings. We're going to increase the cost of living.'...'The Fed is actually about to codify this absurdity by strengthening their commitment to reckless money printing and endless inflation. And you think gold is expensive at $2,000 an ounce? No! It's still cheap.'"