Fed Chairman Ben Bernanke is receiving reinforcements in the form of new dovish members of the Federal Open Market Committee (FOMC) this year. And based on recent comments from the new central bankers, gold is likely to one of many beneficiaries of their monetary policies.
John Williams – President of the Federal Reserve Bank of San Francisco – and Sandra Pianalto – President of the Federal Reserve Bank of Cleveland – made their first public speeches as FOMC voting members yesterday. Both Williams and Pianalto expressed support for the slew of acoommodative monetary policies implemented by the U.S. central bank in recent years.
Although neither Williams or Pianalto explicitly advocated for a third round of quantitative easing (QE3), they both contended that the country’s fractured labor market will take several more years to return to repair. Williams specifically stated that “In this situation, it’s vital that the Fed use all the tools at its disposal to achieve its mandated employment and price-stability goals.”
Williams and Pianalto replaced noted hawkish Presidents Fisher, Kocherlakota, and Plosser this year due to the Fed’s ruling on rotating various FOMC voting members. The changes are likely to help “Helicopter Ben” more easily maintain and implement his dovish views on monetary policy.
In contrast to Williams and Pianalto, however, the third new FOMC voting member this year is Esther George – who replaced Thomas Hoenig as President of the Federal Reserve Bank of Kansas City. George appeared more cautious on the use of further accommodative measures, which echoed Hoenig’s hawkish stance in 2011 as an FOMC voting member.
In her own speech this week, George asserted that the “While the Fed’s current policy settings are designed to encourage risk-taking and stimulate much-needed demand, the mispricing of risk can lead to misallocation of capital and weaker bank balance sheets…making for a ‘very delicate balance’ for the Fed,” according to MarketWatch.com.
Platinum Group Metals Moves Forward Toward Production
In August, Platinum Group Metals entered into a mandate letter with a consortium of financial institutions – including Barclays Capital and the Standard Bank of South Africa Limited – for a $260 million project finance loan to enhance the development of the Western Bushveld Joint Venture (WBJV) Project 1 Platinum Mine. Full Platinum Group Metals News Release.
- Preparation of detailed banking documents for the senior loan facility with the mandated syndicate of banks is ongoing
- The completion of this documentation, due diligence, hedging establishment and off take negotiations are expected to be completed during Q1 and Q2 of calendar 2012
- Project 1 is advancing towards a 275,000 ounce per year platinum, palladium, rhodium and gold planned production profile
- Full commercial construction is budgeted at $443 million and initial commercial production is scheduled for late 2013
