dennis, the fed has spoken. days back, where i do recall you saying you were negative on gold. are you changing now, based on what fed has just done today? >> judge, i don't think i've been negative on gold for a while. i own gold. i'm openly bullish of gold. i own gold in yen terms. i haven't owned it in dollars in a long time. >> can you do me a favor? explain to our viewers what long in yen terms means. >> i own gold -- when you own gold in dollar terms were you are essentially short the dollar. if you own gold in yen, you are long in yen. you can buy in terms of yen, euros, the canadian dollar. i look at gold as being nothing more than another currency. i'm long gold, short the yen. and if you look at a gold in yen chart, it is up over the course of the last month and a half. gold in dollar terms is down. gold in euro terms is down. it is a much better trade to be long in gold in yen terms and it is making new highs right now. it should continue. what the fed has just done has -- it's done damage to the u.s.

the next fed. inted out there is a heck of a job ahead of the new fed presidents and you cannot have somebody like warren summers coming will be bombastic and captain ahab steering the ship wherever it may go. you need consensus and steam working cleaning up the so-called mess. cheryl: i want to bring scott martin into this. one of the things you said on the show several times about dollar destruction, and do blame the fed policies for destruction, fair enough. is there someone in your mind who could replace him and may be strengthened the u.s. dollar and strengthen the economy? >> it will be tougher. to gerald's point, we heard it destroyed the dollar. everyone calls this quantitative easing. it is quantitative sneezing. they made the dollar sick over the last couple years with printing. it is natural economics. you make more of something the price of its goes down. the reality is we are already there. another name my would throw out is robert schiller of yale university, great track record on psyc

so the whole reputation angle of the fed and the efforts the fed has undertaken to better communicate really have been resonating with me lately and we've seen a few struggles and misfires out there and i think that's why we're here today yeah so before we get into some of those let's just talk about the importance of communication for the fed we know that it is extremely important for the fed is it as important as the fed actual monetary policy because the fed can print but attitude and expectations about the economy and the fed abilities are what can cause people to actually lever up and affect some of those behavioral decisions. right exactly and within the federal reserve there's a tremendous sensitivity to how policy is communicated i think it would be fair to say that for the for the fed communication is considered as important as the policy itself it's what determines whether or not policy will be effective i think that's where we start to see some of the struggles in that these you know these are ph d. economists and professional bankers and people whose natural tendencies may

look, the fed was in a quandary. as doing this twisting operation, buying the longs and selling the shorts. it no longer has any shorts to sell. so its choice was do we do nothing which would be a modest contractionary policy or do we just leave on the buying of the longs which would be a modest stimulative policy? of course they chose the latter. liz: professor, one of the things ben bernanke also said was with this new move we are quote, not ramping up stimulus except when you look at the fed's balance sheet it is 2.8 trillion. by end of the next year under this program we'll be at 3.8 trillion. what does he mean he is not ramping up stimulus? is he being honest about that or being a little less than up front? >> i'm not sure. i wasn't at the press conference to ask him questions. sounds like the wording was we're not accelerating. that is we are in stimulative mode and we're continuing in that stimulative mode. we're not really ramping it up. i think in a mine nor sense they are ramping it up because of keeping onl

policy because the fed can print but attitude and expectations about the economy and the fed abilities are what can cause people to actually lever up and affect some of those behavioral decisions. right exactly and within the federal reserve there's a tremendous sensitivity to how policy is communicated i think it would be fair to say that for the for the fed communication is considered as important as the policy itself it's what determines whether or not policy will be effective i think that's where we start to see some of the struggles in that these these are ph d. economists and professional bankers and people whose natural tendencies may not be to communicate in the most transparent mode know that's that the fed is actually very aware of that and it's very sensitive and has a tremendous effort underway to try to be more transparent but as you and i have discussed separately sometimes it takes interesting forms and doesn't always achieve what they're seeking to achieve absolutely and in terms of said speak and its value what is it because i have to imagine that there is a perceived

headlines for one day december twelfth two thousand and twelve its bad interest rate decision day and the fed announced it will expand its bond buying program with forty five billion dollars a month and longer term treasury securities as expected after the conclusion of operation twist at the end of this year speaking of twist though the fed also announced it's now timing interest rate guidance to economic guide posts in these currency wars who's winning who's losing what's the collateral damage the man who wrote the book on it jim rickards is here to discuss plus does devaluing the dollar fuel exports or does innovation and investment do that well if you think it's the latter unfortunately u.s. corporations cut an estimated one hundred seventy five billion dollars in investment from two thousand and nine to two thousand and eleven according to s. and p. which calls this un says stay noble as reported by the wall street journal we'll talk about that and our interview with m.m.t. economist stephanie calton yesterday spurred so many responses six hundred so far it's been less than twenty four h

don't fight the feds or the trend. even on a day like today, it's fascinating in a down day that europe is beating the u.s. beware of the funded extremes, investors across the glop positioned, most underwait places in asia. makes us bullish. david: one sector not fighting the fed are the financial sectors benefiting nicely from the money printing. they got a lot of heat, of course, from regulations en, ect., but so well capitalized the the momentment do you think because they are capitalized and set to grow, that they are a buy at these prices? >> well, excise i agree with. the data, many, many financial firms back to where they were before the financial crisis, i don't know about the earnings part. the earnings outlook for a lot of major firms still is not really great. financials wind up being the best performing sector of the year so far, but not brave enough yet. >> chris, tas nateed with the trend -- fascinated with the trend, but what sectors, and europe is controversial, but which parts? there's southern and nor

is that the fed's change from the fed change from tying interest rate guidance to a date to saying this the fed currently anticipates that the exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above six percent and inflation between one and two years ahead is projected to be no more than a half percentage point above the committee's two percent longer run goal a fancy way for saying to two and a half or cent and longer term inflation expectations continue to be well anchored so they're tying the guidance now to economic data so that's a big shift a big change to talk about what all of this means especially in the context of remember global currency wars which he has been talking about for so much longer way before it became in fashion to do so jim rickards is here author of tangent capital partners or excuse me capital partners author of currency wars the book you see there and really the man to talk about the fed with on a day like today so jim rickards thanks so much for being here thank you are great to be here ye

." >> susie: an historic move today by the federal reserve. fed chairman ben bernanke and other policy makers said they will keep their key interest rate near zero until the unemployment rate falls below 6.5% or inflation rises to 2.5%. now, this is the first time the fed has set a clear economic target for how long interest rates will stay at record lows. the surprise decision means the central bank will continue stimulating the economy by buying bonds. darren gersh explains the dramatic move. >> reporter: ben bernanke and his colleagues will no longer mark a date on the calendar for when they expect to begin raising interest rates. from now on, they'll make that call based on a target for the unemployment rate and inflation. >> it'll act to some extent as an automatic stabilizer. so if the outlook worsens and that leads markets to think that the increase in rates is further out in the future, that will tend to lower longer term rates, and that will tend to be supportive of the economy. so that has an automatic stabilizer-type effect. it offsets

excuse me versus giving out the treatment to the disease that was originally meant to fight but what the feds really fighting is the depression that they won't use that word we've been depressions and two thousand and seven we've had zero interest rates since two thousand and they will probably have them until two thousand and fifteen so whether friday is deflation and depression now things and we say depression because rates have been there for so long that there's just nothing at all we have a very low growth when you can have growth in a depression the problem is you don't get trend growth trend growth is sort of four four and a half percent something like that we're getting one one and a half percent sometimes two percent a good quarter so when you're when you're trying to grow so it's it's the gap between trend growth and actual growth that is depressionary and also deflationary the fed's frightening that now the fed's very good at telling you what they're doing they spend chairman spend an hour and a half answering questions and told you what he's doing they're very opaque about saying

eastern when the fed made the decisions known. take a look at the financials, giving us a sense of how sensitive it got. as you can see, pulled back half a percent to the upside at the moment. bank of america, jpmorgan, citigroup, wells fargo, all of them in the green but not as far as they have been. in economically sensitive group. up about 1.5%. similar story for dupont, gold corporation holding onto most of its leads. let's find out what the traders made of it. you were there in the thick of it at the new york stock exchange. >> as you say, he hadn't said hello and left us at the altar started talking. this is the difference between what the policy says and the reality underneath the policy when the fed chairman, ben explains what they're doing. number one is that we determined the advocacy of the e-zines is not doing the trick, they will go to plan b., whatever that is. he said they do not have an unlimited bazooka so to speak to do this. that put a reality on the market. ultimately what will happen is they will put in a lot

obvious presence of the fed in the bond market today as the major buyer of uncle sam's ious which is keeping rates low or was it the fed's accommodative monetary policy during the boom years and the subsequent urged by the private sector to relieve itself of overpriced assets in the bust that has kept yields from rising in either case we find fault with the fed for if yields were kids we would be a little worried about this. well and the thompson kids too they're about to speak there in the backyard threw them out with the trash. i guess we would call it honey i shrunk the yield curve only in this scenario policy wonks in control of the shrink ray as the particle eviscerate are used by rick moran of his character was actually called seem hardly concerned about our new microscopic interest rates if anything the lower they go the more the fed may print forcing a new class of indentured investor out to scavenge for more yield in the front lawn fortunately for us our next guest is now used to viewing fed policy with a microscopic microscope bimonthly in his latest issue of grants the let

really sorry just one more moment when he was asked how has the fed been projections you know have they been accurate in some cases here is how he responded let's play a bit. it's fair to say that we have overestimated the pace of growth. total output growth g.d.p. growth from from the beginning of the recovery i think it's only fair to say that that. economic forecasting beyond a few quarters is very very difficult. for some jam especially lauren especially when the forecasting concerns the future i can i'm older than chairman bernanke and i have many more arrows under my belt therefore much more experience but let us not forget that these people missed the biggest cyclical event of their lives in the two thousand and seven eight and nine experience i mean how about just a little bit of humility in the face of the ignorance we all confront in the thing we call the future i mean so any way you are asking for me i think i don't do it that side so so. so the federal reserve wants us to know that it will be vigilant when inflation reaches the measured ra

under 2%, the fed official target. y dandy new chart they have been giving us which is a poll the 19 members, their thoughts on the appropriate timing of policy when they should start to tighten policy. two members believe policy tightening should begin next year, 2013. we begin in 2014, the majority, 13 of them believe it should start in 2015 and one believes the fed should wait until 2016, ashley and tracy, back to you. tracy: peter barnes, thank you very much. ashley: unemployment consistent. on the floor of the new york stock exchange as we do every 15 minutes. nicole petallides, the markets did a double take when we got this announcement from the fed but now moving nicely higher. nicole: we have that back-and-forth action as we got the play-by-play. in monetary policy remains much of the same, very accommodated from our fed head. with them doing just that, that basically says we are here for you and we are ready to back just about everything and give the opportunity for the market to continue higher. moving equitie

dow up 80 points until the fed chairman spoke and now we're down 6. heard a lot about how companies will have to lay off workers if we go over the fiscal cliff so why does a new manpower survey show more companies are planning to hire workers in the first quarter of '13 than lay them off. we'll speak exclusively to the company's ceo to try to figure this out still to come on the "closing bell." stay tuned. try running four.ning a restaurant is hard, fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready

treasury for its borrowing needs have been the result of the fed the ratios appetite for fixed income securities in the past four years that yields have been if this rated by fed policy there is no question the only question for us is if this is the result of fed policy past or present in other words is it the seemingly obvious presence of the fed in the bond market today as the major buyer of uncle sam's ious which is keeping rates low or was it the fed's accommodative monetary policy during the boom years and the subsequent urged by the private sector to relieve itself of overpriced assets in the bust that has kept yields from rising in either case we find fault with the fed for if you were kids we would be a little worried about this. the shrimp the kids. and the thompson kids too they're about to speak there in the backyard like through the boat with the. same group at the door. i guess we would call it honey i shrunk the yield curve only in this scenario policy wonks in control of the shrink ray as the particle eviscerate are used by rick moran of his character was actually calle

the fed -- a lot of people blame the fed for everything, seems a little ludicrous, what the fed is saying, listen, guys, compromise and if you don't, you got to expect stocks to go down. consumer confidence coming down, small business coming down, compromise or else here is the future. the future is lower stock market. >> right. >> so i think that there is a -- there is a very funny thing going on. we have rich people coming down to washington saying, listen, we will take our taxes but got to give a compromise. there's this curious where's tim geithner with specific doubts really get this thing going? what do they come up with? what did eamon javers come up with the other day? raise taxes a little less than you thought. he comes out and says, listen, medicare, make it this new able. we'd deal. but it's the president that is -- >> a deal if it gets done, how you get there is a question mark. does he finally need to know they are going to proceed to the increase in tax rates that he wants or close to it, then come with the spending or what comes first? >> the chicken and egg, we are startin

it is buy into the fed and then sell on the news.ne of the oldest trades out there and it is a profitable trade. so we hit two-month highs going into the fed meeting and since then we have been drifting lower. what happened on september 14th. we hit a 4 1/2 year high. now they bought right into the fed meeting on september 13. remember? that is when the fed announced the new qe measures. and just a week before that, announcements to spur tit in europe p so buy into the feds, sell on it. people have been asked by playing inflation here. let me give you heavy volume in the pro share short treasury, tbt. twice the inverse of the treasury. got to be careful with this because it can only get results on a one-day basis. but a lot of people, maybe inflation will be an issue in 2013. >> sure, absolutely. >> it wasn't in 2012. but this trade is a big one. if it ever happens it is a huge trade. >> it is important to mention that that eta is twice the inverse. >> and it doesn't correlate on the long-term basis. only on daily basis. be careful.

ward, as you point out, the fed has its foot to the pedal.fed bailing out the white house and congress? >> oh, i don't think that's the objective. i think what they are trying to do is save the citizens of this country from the white house and congress by doing as much as they can on monetary policy to try to create job growth. we lost 8.8 million jobs during the recession. we have only a little more than 5 million back. jobs, jobs, jobs. that is what the fed is trying to do, create jobs. >> but the problem is it's not a typical recovery. generally easing works. the fed brings down interest rates. all of a sudden businesses, individuals take on new loans, we see business growth. we see job growth recover quickly and all of a sudden wage pressures begin to increase. this time around easing has not translated and unemployment is 6 million short of the previous high and wage pressures are nonexistent so the fed really, it's questionable whether or not monetary policy can be effective at this point. >> it's interesting, you know, ward you're sayi

i put more of this on sell on the news of the fed. spike and bond yields got a lot of e-mails talking about inflation in 2013. this has not been a successful trade but number of the etfs exist out there. spider gold trust with the classic hedge against inflation. one to five-year tips. very big etf. then you can even bet against long-term treasuries with the shares ultra short. only works for a day. but none of these have been particularly successful this year. none of them are particularly on fire. but tle do exist if you're interested in dealing with inflation. mandy? >> and we are interested. we are always interested in dealing with inflation. thank you, bob. talking of long-term treasuries. rick, i believe we saw quite a soft 30-year auction today. >> i tell what you, the auction was definitely on the spongy side. but then again it seems as though bob was pretty correct that yesterday, for whatever reason, the bears really started to celebrate on the idea that treasuries were ripe for the selling. even though they have sold off a b

the fact that the fed is there, the fact that the fed is trying to get ahead of the fiscal cliff and we've got these big bond buying programs. and the last time, remember, in august of 2011 when we had the last showdown, what happened? bonds rallied. >> and you said you want this to be fixed. you almost need the markets to be more volatile than they are. >> that's one of the theories that people have thrown out there is that the politicians won't do something until the markets forced them to do it. >> let's get to kelly evans, talk to the global markets. kelly, i want to tie this to you, tie this to your purview over there. every year, i get a tie from van ek and i got -- the first one was bernanke, a picture of him in a helicopter. and then i got one with draghi and a can and euro signs. yesterday, it's back to bernanke with the helicopter, but it's alternating with draghi with euros because now he is out helicopter draghi. so we're all in concert in a world that can't seem to exist without liquidity. we wasn't do anything based on our feds. it's not a great world to be in. >> well,

the fed typical intense fies the program what we need to do is roll back the fed as well. the conventional wisdom surrounding the fed is dead

i think most people expect exactly what eric miller was talking about from the fed. and bern bueno ben bernanke hasn transparent and telling people well in advance what he is going to do. the $85 billion should continue building up for our taxpayers balance sheet. >> susie: how does all of this play out in the markets. all of the bond buying, companies are still holding off from hiring and spending, and now the risk, possibly of a recession. how does it play out in the markets for 2013? >> what has happened, with all of this cash going into the market -- into the economy, not only from the u.s. fed, but from europe, from the central bank there, as well as from china, don't forget, so we've had this liquidity which has taken asset prices with the stock market and the bond markets, pricing it way up, it is actually helping housing after a long wait. moving into the future, there will be some reduction in really the fear that people have. it is not only a lack of confidence, but it is a fear of things going wrong. as we get day to day, i think the fed has been the only p

the global u.s., the economy is of the fed, by the fed, for the fed. we have now $65 trillion worth of global assets tied up at zero interest economies. what's that doing for economies? they are looking for yield, junk bond issuance at its highest level ever by allotted, so you're seeing -- that's where this trade is going to keep going. investors setting themselves up for a lot of trouble. the third thing is now basically investors are at sea. what do you do? i'll tell you a very telling story. bank of america 2013 outlook. they are super bullish and hung a 1600 on the s&p next year and said the biggest downside risk improvement in the u.s. economy because that might get the fed to scale back. that's how you show how dependant we are and what little confidence they have of what's going on in washington. >> does that mean if we get a deal any time soon out of washington that the market rallies and the volatility ends, or what are you expecting? >> i think the volatility will end somewhat at that point. as the other guests have said, i think there is tr

is that the policy that the fed is now following? and secondly, if i may, you've referred to a number of inflation forecasts in your introductory remarks. in that case, how will we ever know that the inflation threshold has been hit? thank you. >> so the kind of optimal policy path that vice chairman yellin showed is indicative of the kinds of analysis we've done. we've run it for a variety of different scenarios and differed models and so on, but the general character of that interest rate path, ie, that it stays low until unemployment is in the vicinity of 6.5 or a little lower and then rises relatively slowly, which goes back to the question that was asked earlier that it doesn't involve a rapid removal of accomodation after that point is reached, that is consistent with that kind of analysis, and that's the type of analysis that was not the only thing we looked at but was informative in our discussion. you'll note also in that kind of policy path of the type that she discussed that inflation stays essentially at 2 or very close to

liz: the fed, the fed, the fed. they're not going to do anything, but they might announce some sort of easing that is what we constantly talk about and wonder because that has been the trade. with it had a decent rally, the market up double digits the past year and a half very much in part because of the fed pillow put under there. what do you think happens and will there be tougher trading until then? announce a purchase program about $45 billion per month. that will accompany mortgage-backed buying program announced it is september cme. the fed will be buying up about $90 billion in securities between long dated treasuries and mortgage-backed securities so the fed balance sheet by thie financierthistime next year shor to 4 trillion is compared to where it is today close to 3 trillion. they will continue to monetize the debt, as you and your viewers should know, this debt will not be sterilized so bank balance sheets will continue to expand. lots of capital chasing even fewer yields in the market and that in itself

aggressive policy from the fed. unaggressive as tyler mentioned the idea of using economic targets for funds rate. we know they were talking about it. we know there was support. we didn't think the federal reserve had unanimity enough to do this. only jeff lacker from richmond fed gave incentive this time around. there is a bit of confusion as i head this statement. there's two different things going on. one is asset purchases. other is funds rate target. there are two different litness tests for now long they go on. federal reserve says it'll keep going if the labor market doesn't show signs of improvement. we have to ask bernanke how well this works together adds a whole, to really explain what is going on here. >> what is the implication steve, of that economic trigger on the fed's funds rate. for investors holding fixed income assets. as you move down towards the 6.5% magic point. what happens in the markets? >> well, i mean, you a sense e sensitively, the market will anticipate either an ending of of the program

economy we'll hear from them plus brace yourself the f one c meets next week and some are forecasting the fed may announce more bond purchases after they do so so what is the antidote to unhinge money printing and centrally planned price fixing could gold play a role john butler is here to counter some claims we heard on this show earlier in the week and our trip down memory lane with author kevin phillips on his account of seven hundred seventy five lead to some questions on the economic history of the time of the war will respond to your feedback let's get to today's capital account . it's that time again next week the federal open market committee meets and some anticipate we could see an announcement for more bond purchases after they do so to allegedly continue trying to boost the economy to help with that we grow we keep saying but it is the fed's manipulation of interest rates and involvement in the economy actually doing the opposite to growth is it hurting growth to lay it out john butler is here he's founder of m. four a capital and author of the book you see here the golden revolut

missteps so the whole reputation angle of the fed and the efforts the fed has undertaken to better communicate really have been resonating with me lately and so we've seen a few struggles in misfires out there and i think that's why we're here today yeah so before we get into some of those let's just talk about the importance of communication for the fed we know that it is extremely important for the fed is it as important as the fed actually monetary policy because the fed can print but attitude and expectations about the economy and the fed abilities are what can cause people to actually lever up and.