If you have ever taken any Higher Education classes on Statistics, You know that Statistics can easily be manipulated to support just about any agenda.

One set of statistics can be used to prove a conclusion, and another set of statistics can be used to disprove a conclusion. One set may seem just as legitimate as its opposition. The difference can be as simple as the exclusion of a single vairiable, from one set, that is included in the other set. 

Since very early in my life, I have held a strong interest in History and it's relationship with Economics. The Lord has blessed me with a Broadly Ranging Higher Education, and the ability to recognize relationships between seemingly unrelated events. I onece had a Professor who revealed, to me, how easily statistics can be portrayed to support any view chosen - even when they are in opposition to each other.

I have always held access to a multituede of intellience resources. It has proven beneficial, to sort through  the information provided to me, and form my own conclusion. The purpose of this post is to share an email I received today. If you are knowledegable, and know how to read between the lines, I think you may find this piece very enlightening! The first thing that jumped out into my attention, is that inflation is grossly underestimated. That is really no surprise, considering that they have been tweeking their statistical formaulas for many years now. 

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Without further todo, here is some important data for your reading =

Fed Keeps Easy Money Policies Going
 

Gold traded higher Wednesday afternoon after the Federal Reserve kept its easy money policies intact.

At the conclusion of its two-day policy meeting, the Fed kept its official interest rate at the rock bottom range, from zero to 0.25%, and did not signal a "tapering" of its monthly $120 billion bond purchases that the Fed began last year to stimulate the economy.

Gold initially traded up $9.30 at $1,783.40 an ounce after the Fed meeting today.

Tapering Ahead?

Fed officials hinted that the central bank may pull back on its monthly bond purchases later this year. "If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted," the Fed said today.

The chorus for higher interest rates is growing louder on the Fed's monetary policy committee. Today, the Fed hinted that they might start to raise interest rates next year. Nine members of its policy-making committee said it may be appropriate to raise interest rates in 2022 - up from seven who said that in June.

Downgraded Economic Forecasts

The Fed also warned today that the U.S. economic picture won't be quite as rosy as it forecast this summer.

Fed officials conceded that stronger than expected inflation and lower than expected growth lie ahead. The Fed now expects the U.S. economy to grow at a 5.9% pace, versus its 7% forecast in June. And, the Fed now expects the annual inflation rate to sit at 4.2% by year's end, higher than the 3.4% June projection. That remains well above the Fed's target inflation rate of 2%.

Fed Faces Complicated Picture

In the months ahead, the Fed faces a number of key challenges and must attempt the delicate dance of normalizing monetary policy (raising interest rates), while trying to prevent a widespread stock market sell-off and downturn in the economy.

Black Clouds Loom

Stocks traded higher Wednesday, fueled by a continuation of the easy money policies. Yet the prospect for higher taxes, the debt ceiling standoff in Congress and concerns about systemic contagion from China's Evergrande crisis hang over the stock market. This week, Morgan Stanley said the stock market could plunge 20% as fiscal stimulus is withdrawn and economic growth slows.

Gold investors may remember the damaging political fight in 2011 over the debt ceiling limit. The impasse between Republicans and Democrats took our country to the brink of default, resulted in a credit downgrade for U.S. sovereign debt and sent the stock market plunging. Gold soared then to its all-time high just above $1,900.

The current stand off between Republicans and Democrats in Congress over raising the federal debt ceiling remains a key risk on the horizon to the economy and our nation's credit rating in the weeks ahead.

Thankfully, as a gold investor, you can feel confident that your diversification into tangible assets creates certainty for you in an uncertain world. Gold has been a vehicle to grow and protect wealth for thousands of years. The confidence you get from owning gold is unmistakable. If you'd like to explore if your portfolio is properly diversified given the rising risk levels ahead, call your Blanchard portfolio manager to review your current allocation levels.