The financial media have been hyping the taper since mid-June. As September 18 drew near, the media were filled with predictions of a taper.
As you know by now, I regarded the entire thing as nonsense.
Bernanke announced no change. So, what else is new?
The Wall Street Journal announced the news within minutes. The following is pure spin.
After spending months preparing the public that they could begin to wind down an $85 billion-a-month bond-buying program at their September policy meeting, Federal Reserve officials got cold feet Wednesday and decided to keep the purchases in place.
The FOMC got cold feet! The FOMC did no such thing. The whole September taper prediction was a fabrication of the media. It fed on itself.
The FOMC has issued the same boilerplate since December 12, 2012. I posted this list of identical statements here. I said that the FED was unlikely to reverse itself. The economy has not changed.
I wrote that the talk of the September taper was the product of silly market analysts. I posted the article here.
As soon as Bernanke announced no change, the Dow shot up 169 points. Gold shot up $52.
Here is what I told my GaryNorth.com subscribers on September 17.
I think the more important question is this: “What will be the effect on commodities if there is no announcement of tapering?” That would tend to keep the prices of commodities high, on the assumption that the Federal Reserve is not going to alter its monetary policy, which is what it has implied in every press release since the announcement of the new policy in December 2012.
Nothing has changed. More to the point, nothing had changed since June.
When the financial media agree on a sure thing, prepare for the opposite.