Closing Gold & Silver Market Report, 06/12/2012
FED CONFIRMS RECESSION’S EFFECT ON MIDDLE CLASS WEALTH
A report released by the Federal Reserve on Tuesday confirmed what many Americans already knew: The Great Recession wiped out a significant amount of household wealth and hit the middle class especially hard. Median net worth in the United States declined by 38 percent between 2007 and 2010. These declines in net worth have had a negative effect on consumer spending, which makes up about 70 percent of the American economy. This reduction in consumer spending, in turn, made the recession longer and deeper, and the recovery painfully slow. “What you see is an economy that’s really very, very stressed for the bottom 60 to 70 percent of the population that’s struggling just to make ends meet,” said Lance Roberts, chief executive of Streettalk Advisors LLC.
Chicago Federal Reserve Bank President Charles Evans made remarks on Bloomberg Television in favor of more monetary stimulus and quantitative easing. Despite the fact that Evans has held a view that more stimulus is needed for quite some time, his remarks today added fuel to a rally in stock markets Tuesday. “This market seems to embrace the idea that flooding the system with money is going to somehow make things better. It’s almost Pavlovian; someone says more stimulus, and boom,” said Mike Shea, managing partner at Direct Access Partners.
At 4 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,610.90, Up $14.10.
- Silver, $29.01, Up $0.31.
- Platinum, $1,455.50, Up $4.20.
- Palladium, $625.00, Down $0.10.
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