Fed blew the housing bubble, then sought to pop it, transcripts show
"Market intervention is why central banking was invented. Intervening in markets is what central banks do. They have no other purpose. ...And so we have come to an era of daily market interventions by central banks -- so much so that the main purpose of central banking now is to prevent ordinary markets from happening at all."
-- Remarks by a high school graduate at GATA's conference in Washington, April 18, 2008. (See http://www.gata.org/node/6242.)
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Transcripts Show Fed Wanted Housing Slowdown
By Robin Harding
Financial Times, London
Thursday, January 12, 2012
WASHINGTON -- The US Federal Reserve fretted about a slowdown in housing in 2006, but never considered the possibility that it could cause a financial crisis, according to complete transcripts of that year’s meetings.
Almost every Fed policymaker concluded that weaker housing would cause a slowdown in consumption and investment but expected that to offset strength elsewhere in the economy, leading to continued growth overall.
"Housing is the crucial issue. To get a soft landing, we need some cooling in housing," said Ben Bernanke, Fed chairman, in his summing up of the economic situation in March 2006. "I think we are unlikely to see growth being derailed by the housing market."
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Prophecy Drills 384.9 Meters Grading 0.623 g/t PGM+Au,
0.3% Ni, 0.15% Cu (0.45% NiEq) From Surface At Yukon Wellgreen Project
Company Press Release
Thursday, December 8, 2011
VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the final drill results from 2011 drilling at the company's fully owned Wellgreen platinum group metals, nickel, and copper project in the Yukon Territory.
Borehole WS11-192 intercepted 384.9 meters of 0.45 percent nickel equivalent starting from 9.45 meters depth. Included in this greater interval of continuous mineralization is a platinum group metals-rich zone with a combined platinum-palladium-gold grade of 1.358 grams per ton over 19.23 meters (nickel equivalent 0.74%).
The final drilling results for 2011 have shown the Wellgreen Central-East and Central-West deposits to be one contiguous body, whereby there is good potential to broaden significantly the Central-West resource base, which currently contributes only about a quarter of the current 43-101 compliant resource at Wellgreen. Overall the drilling program met with good success in expanding the resource to the east and south. The long drill intercepts suggest the deposit remains very much open in those directions.
For the complete drilling results and the full company statement, please visit:
The transcripts, released on Thursday, highlight the failure of the Fed -- one matched by most other central banks, commentators, and economists around the world -- to spot dangers to the financial system from subprime mortgage lending. That complacency set the stage for the devastating crisis that began in the summer of 2007.
Throughout 2006, Fed officials were aware that a sharp slowdown in house building and sales was under way. "Even the Carolinas are starting to fold over, and the weakest area is California," said Richard Fisher, Dallas Fed president, at the August meeting. "The big five builders and other homebuilders are reacting as you might expect. They are cutting staff."
Indeed, a number of Fed officials saw the housing slowdown as welcome news that would help resolve a potential threat to the economy.
"As to housing, we are in fact, as all have noted, squeezing out of that sector the speculative excesses that developed with the low interest rates of recent years -- and doing so is unavoidable if we want to correct the sector," said Thomas Hoenig, then president of the Kansas City Fed, at the September 2006 meeting of the FOMC.
Fed officials made special efforts to talk to housebuilders, reflecting their fears about investment and consumption, but there is little evidence that they looked at where the credit to support the previous housing boom was coming from.
"Predatory lending is rearing its head at the lower end of the scale, and it's something we have to continue to watch for. However, before I leave housing, let me just say that the bottom line is that overall mortgage credit quality is still very, very strong. We're seeing predatory lending only in pockets of the market," said Susan Bies, another governor, at the September meeting.
The transcript of the October 2006 meeting also describes Mr Bernanke"s first attempt to push the FOMC toward an explicit inflation objective, something that he has now returned to and which will be up for debate at the Fed's next meeting in a couple of weeks.
The transcripts reveal widespread support for setting a clear inflation objective on the FOMC, but most members, including Mr Bernanke, preferred to move gradually. Then, as now, the biggest concern was how putting a number on the Fed's inflation goal would affect its other objective of maximum employment.
"I support the enunciation of a long-run numerical inflation objective," said Janet Yellen, then president of the San Francisco Fed and now the vice-chair leading the Fed's communications review, at the October 2006 meeting. "My main worry is the potential for de-emphasis on the other part of our mandate, namely maximum sustainable employment. Such a de-emphasis could occur in the minds of the public, and I could easily see how it could affect our own deliberations."
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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters
From a Company Press Release
November 22, 2011
VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.
"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."
Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.
For the company's complete press release, please visit: