David Einhorn (president of Greenlight Capital) says US monetary policy is making the mistake of assuming that because one “Jelly Donut is a yummy mid-afternoon energy boost” then 36 must be 36 times as good.
David makes the point “that you can have too much of a good thing and overdoses are destructive. Chairman Bernanke is presently force-feeding us what seems like the 36th Jelly Donut of easy money and wondering why it isn't giving us energy or making us feel better.”
picture: brown cardnal
The rest of the article explains how the average person reacts to Bernanke’s approach. His conclusion is that “if we didn't have a Jelly Donut monetary policy, I would sell gold, sell bonds and buy stocks. … As a result, I will keep a substantial long exposure to gold -- which serves as a Jelly Donut antidote for my portfolio.”
Download today’s full Blog Watch (pdf 232kb) for more reviews, including:
SWISS REFINERY DEMAND MASSIVE
Egon von Greyerz (Swiss firm Matterhorn Asset Management) says that Swiss refiners are “working round the clock because demand for gold is so massive.”
WAITING FOR THE OFFER
Julian D. W. Phillips explains two techniques by which central banks (mostly eastern countries) accumulate gold without telegraphing their actions to the professional market and thus move the price.
WHERE ARE SWITZERLAND’S GOLD RESERVES?
Continuing our Swiss & central banks theme, Perth Mint Certificate Approved Dealer GoldCore report on a Bloomberg article where the Swiss National Bank (SNB) responds to calls to disclose where its gold is stored.
THE MOST BORING GOLD MARKET EVER?
BullionVault follow up on yesterday’s piece on gold market recessions with an analysis of gold’s volatility.