As Jim Sinclair says, it'll be QE to infinity

Section:

Fed Weighing Further Easing, Bernanke says; Calls Study 'Prudent Planning'

By Greg Robb
MarketWatch.com
Wednesday, July 13, 2011

http://www.marketwatch.com/story/fed-weighing-further-easing-bernanke-sa...

WASHINGTON -- Just two weeks after completing a second extraordinary effort to juice the moribund U.S. economy, the Federal Reserve is contemplating more "untested" steps, the head of the central bank said today.

Federal Reserve Chairman Ben Bernanke says the central bank is examining several untested means to stimulate growth if conditions deteriorate, even though the central bank believes the temporary shocks holding down economic activity will pass. The Fed at the end of June completed a plan to buy $600 billion worth of Treasury bonds in what markets have dubbed "QE2."

"The possibility remains that the recent weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying additional policy support," Bernanke told the House Financial Services Committee, in the first of two days of testimony about the economy and monetary policy.

... Dispatch continues below ...



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Prophecy (TSXV: PCY) Secures Russian Far East Seaport Allocation
and Updates Ulaan Ovoo Mine Production

Company Press Release, June 14, 2011

VANCOUVER, British Columbia -- Prophecy Coal Corp. TSX-V: PCY)(OTCQX: PRPCF)(Frankfurt: 1P2) has arranged with the Port of Sovgavan in the State of Khabarovsk, Russia, so the company will have initial access to port allocation of 25,000 tonnes of coal per month starting this month, potentially expandable to 50,000 tonnes per month, representing 300,000 to 600,000 tonnes annually. Prophecy also will be assigned a coal storage area at the port.

This arrangement provides Prophecy's Ulaan Ovoo thermal coal mine with immediate access to the Asian seaborne export coal markets. Sovgavan is strategically located on the seaboard of the Russian Far East. The port is privately owned and can accommodate seagoing vessels of up to 160 meters in length, with the depth of loading site of 9.5 meters. The port has loading capacity of 6,000 tonnes per day and direct connections to Trans-Siberian railroads and uncongested Russian state highways.

Securing the port opens Prophecy to a significant number of coal buyers, and the company is placing top priority to conclude rail transport within Russia and coal offtake contracts.

Prophecy's Ulaan Ovoo mine commenced production in 2011. So far this year the mine has produced 200,000 tonnes of coal, which are being stockpiled. The average quality is 4,200 kcal/kg NAR with 5 percent ash and 0.5 percent sulphur. Those attributes compare favorably to the coal being purchased by local Russian and Mongolian power plants.

For the complete company statement, please visit:

http://www.prophecycoal.com/news_2011_jun14_Prophecy_Secures_Russian_Sea...



The announcement caught markets by surprise, and stocks immediately jumped and the dollar slumped after Bernanke's comments. U.S. stocks gained about 26 percent and the dollar fell 7 percent during QE2.

At the moment, Fed officials see a recovery that "will likely remain moderate," Bernanke said, with the unemployment rate falling "only gradually." Inflation is expected to subside in coming months, he said.

Fed officials have forecast that the economy will expand at around a 3.5 percent rate over the next 18 months and Bernanke said this remained the forecast.

"Once the temporary shocks that have been holding down economic activity pass, we expect to again see the effects of policy accommodation reflected in stronger economic activity and job creation," Bernanke said.

But there are a "range of uncertainties" about the strength of the recovery and the Fed must engage in "prudent planning" to explore ways for stimulating demand, he said.

Bernanke discussed three approaches to further easing in his prepared remarks.

One option, Bernanke said, would be for the Fed to provide more "explicit guidance" to the pledge that rates will stay low for "an extended period."

Another approach would be another round of asset purchases, or quantitative easing, or for the Fed to "increase the average maturity of our holdings."

Finally, the Fed could also reduce the quarter percentage point rate of interest that it pays to banks on their reserves, "thereby putting downward pressure on short-term rates more generally."

"Of course, our experience with these policies remains relatively limited, and employing them would entail potential risks and costs," Bernanke said.

Bernanke was clear to stress that easing was not the only option under consideration and that the next Fed move could well be to tighten.

The broad consensus of Fed watchers has been for the Fed to hold rates steady until the middle of next year and then begin to exit from its ultra-low policy. Only a few economists had predicted an easing. But that was before the June unemployment report, which showed the labor market was just about dead in the water.

The Fed chairman detailed the "broad consensus" among Fed officials about how the Fed plans to exit. This agreement was unveiled in the minutes of the Fed's June meeting released on Tuesday.

Bernanke defended the Fed's controversial second round of asset purchases, or QE2, saying that it lowered long-term interest rates and boosted employment.

"When we began this program, we certainly did not expect it to be a panacea for the country's economic problems," he said.

Bernanke said Fed officials still believed the unemployment rate would decline to a range of 8.6-8.9 percent by the fourth quarter. The jobless rate has moved up to 9.2 percent in June from 8.8 percent in March.

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Golden Phoenix Shareholder Conference Call To Discuss
Start of Gold Production at Mineral Ridge Gold Project

Company Press Release, June 27, 2011

SPARKS, Nevada -- Golden Phoenix Minerals, Inc. (GPXM) has scheduled its second quarter 2011 shareholder conference call for Tuesday, July 12. Shareholders are invited to participate in the call, will begin at 1 p.m. Pacific and 4 p.m. Eastern time.

Company management will provide updates on accomplishments in the second quarter and explain how the company's royalty mining growth strategy is expected to unfold in the second half of the year.

Topics to be updated include the start of gold production at Mineral Ridge, developments on the Vanderbilt Silver and Coyote Fault Gold projects, the Shining Tree and Peru projects, and drilling plans for 2011. Questions from shareholders will be answered as well.

"Thirteen months after closing the joint venture between Golden Phoenix and Scorpio Gold, the Mineral Ridge property has entered gold production," said Tom Klein, CEO of Golden Phoenix. "Last week both companies completed joint tours of Mineral Ridge. We look forward to providing a complete update on our conference call."

Participation in the shareholder conference call can be arranged by telephone, webcast, or Skype. To participate, dial 952-356-0015 and enter Conference ID 419582#.

For the company's full press release, please visit:

http://goldenphoenix.us/pressreleases/

Golden Phoenix (GPXM) is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company's business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here: http://www.GoldenPhoenix.us