Kitco News, Released on 8/29/21

Fed Chair Jerome Powell announced on Friday at the Jackson Hole Symposium that the U.S. central bank will consider tapering by the end of the year since the economy is on track to meet full employment and hit the Fed’s inflation targets.

Hanke noted that in the past, interest rates have gone up before a reduction in asset purchases, or tapering, happens, but this time the Fed is doing the reverse; they are announcing plans to taper before a making lift-off commitments, which require more stringent economic conditions, according to Powell’s speech.

“[Powell] thinks by changing the rule that we won’t have a tantrum like we did in 2017. We will have a tantrum, because once they stop shrinking the balance sheet and slowing down the money supply, I think the markets are going to be off balance completely,” Hanke told David Lin, anchor for Kitco News.

The Hanke-Cofnas Gold Sentiment Score: https://www.thegoldsentimentreport.com

0:00 – Monetary policy, inflation
17:05 – Cryptos regulated in Cuba
24:50 – Gold sentiment index

Steve Hanke is an American applied economist at the Johns Hopkins University in Baltimore, Maryland. He is also a senior fellow and director of the Troubled Currencies Project at the libertarian Cato Institute in Washington, DC, and co-director of the Johns Hopkins University’s Institute for Applied Economics, Global Health, and the Study of Business Enterprise in Baltimore, Maryland. Hanke is known for his work as a currency reformer in emerging-market countries. He was a senior economist with President Ronald Reagan’s Council of Economic Advisers from 1981 to 1982, and has served as an adviser to heads of state in countries throughout Asia, South America, Europe, and the Middle East. He is also known for his work on currency boards, dollarization, hyperinflation, water pricing and demand, benefit-cost analysis, privatization, and other topics in applied economics. Hanke has written extensively as a columnist for Forbes magazine and other publications. He is also a currency and commodity trader.

  economy, Fed, gold, markets, steve hanke, taper