UPDATE: Added Romney's Bernanke-Busting Clip
With Romney's comments (that QE2 didn't work, that he doesn't back QE3, and that Bernanke should go) somewhat cornering the Fed-Head's decision-making, CNBC's Rick Santelli's comments this morning are even more prescient. The Chicago truth-sayer vociferously noted the increasingly politicized Federal Reserve actions, highlighting Schumer's recent 'demand' that Bernanke do his job. With Bullard this morning noting that muddle-through was not enough to justify the size of QE3 the market seems to be anticipating, it appears any actions by the Fed in the near-term can only be seen as political. The only way to justify any sizable NEW QE is then surely for the market to crash - and with Spain's no-bailout-soon, and Merkel back in the headlines, who knows what's possible. One thing is certain: under Romney the country will need a Fed Chairman. And if it is not Bernanke, despite Glenn Hubbard's promises yesterday [7], one very likely name will be Hubbard's close friend and co-author: Goldman's Bill Dudley, who now runs the NY Fed. One wonders which choice will be worse for the country (if not for gold longs) - the Chairsatan or Bill Dudley? Of course, look for Obama to retaliate and promise to para-drop dolla dolla billz if elected. Critically, the wizened ex-Gold trader Santelli notes the precious metal knows this and is acting as a barometer of anxiety in this stand-off.
Full CNBC Santelli Transcript:
Here is the question.
I am not sure anybody can answer it and it is couched in humor but just a bit. Is the Fed apolitical or is the fed a lot political?
Well, you know, in mid-July (and remember, November 6th, November 6th is the election), most politicians on either side of the aisle and even the middle of the road aisle (if you want to count that as a political position), they really don't want to give you too much because they want to hold back a bit - [because] the more things you say, the more ways you can get penned in by the other side.
It seems as though in mid-July in front of the senate banking committee there was some instructions in my opinion given to Ben Bernanke.
Listen to senator Schumer. "The Fed is the only game in town, so get to work, mr. chairman."
In my opinion you can say that is a bit of humor, but in the context of objectivity, if i take a step back and if it looks like a duck and quacks like a duck, sometimes it is a duck.
We know the politicians don't want to get off-center.
I think that Bernanke seems to be dragging all of this up in a timeline that certainly seems to intersect with november 6th.
I look at gold. i cut my teeth trading gold late '70, early 80s. looks like it is up $36.
What is making gold move? This is a debate on the floor everywhere.
In my opinion what makes gold move in a proactive trending way is any time the barometer of anxiety goes up.
September is approaching, Europe, you know, Mario Draghi, I don't think what he said is doable. I think what he said when he said it was absolutely brilliant. It bought them four to six weeks. You know, that might not sound like a lot to everybody, but it has stabilized the markets.
I think that gold when it corrects, when it goes from active trending based on anxieties to the upside, liquidation mode is much more random.
I think that's where everybody kind of gets off the game plan. When it goes into correction mode some people are liquidating and some people are paying other positions. In the end I think we're in the proactive trending phase and i wouldn't dismiss how much higher gold can go.
and here is Romney's Bernanke-Busting Interview (the Bernanke discussion starts at around 7:10)...