Sept. 27, 2011
-- Stocks tumbled last week as Wall Street shrugged off news of the Federal Reserve'smove to direct $400 billion into longer-term Treasuries and wondered if Europe's debt troubles might trigger a recession. At mid-week, the Federal Reserve and International Monetary Fund managing director Christine LaGarde both noted "downside risks" to the U.S. and world economies. Thursday night, finance ministers and central bank governors from the Group of 20 pledged they would make a "strong and coordinated international response to address the renewed challenges facing the global economy" - a welcome declaration, yet the S&P 500 still slipped more than 6%on the week. Uncertainty and fear kicked up several notches this month, which caused a run to safety, and gold and bonds were the favorites. It’s interesting that we’re seeing both traditional inflation and a deflation indicator rising together as safe havens. With continued fears with sovereign debt in the European Union and lack of ability for U.S. Congress to come together to pull together to pass legislation to create jobs and contain our balance sheet gold maintains it's bullish trends despite a recent pull back due to the CME's margin hikes.