Essentially, the Fed has been pushing stock and bond prices up to "bubblish" levels, in the expectation that they will inspire the kind of consumer spending, physical investments and hiring required to subsequently justify them. The hope is that the convergence will occur in the context of full employment.
While chatter is starting to heat up that equities are in a bubble, the real bubble seems to be ignored for the most part. The larger, more concerning bubble is in the Treasury marketplace where the Federal Reserve continues to print money.
Gold prices closed at their lowest level of 2012 after having probed even lower (around $1,540) during the trading day on Tuesday. The dollar’s 13-day advance is the longest winning one since the trade-weighted index was created.
Barclays Capital analysts find that the slow but steady leakage of metals tonnage from various ETFs is underscoring the ebbing interest in precious metals at the present time. Gold balances in such vehicles have declined by six tonnes this month.