New York, New York (PressExposure) December 22, 2009 -- "Mann International", the Asian-based asset manager, has told its clients that the next few weeks and months will test the US Federal Reserve's resolve as well as confirm to investors where its priorities lie.
The firm apparently said that the dual purview of the Federal Reserve was to manage inflation and economic growth but, with the huge stimulus measures still working through the economy, inflation has begun to manifest itself as demonstrated by the release of the latest PPI figures. These showed bigger-than-expected growth in industrial production and wholesale inflation in the US, most of which was blamed on higher fuel prices brought on by the weak dollar.
Output from factories, mines and utilities climbed 0.8 percent, after no change in October, the Federal Reserve said whilst a report from the Labor Department showed that prices paid to producers rose 1.8 percent last month.
"Mann International" suggested that this could place the Fed in the difficult position of having to rein in inflation to the detriment of the fragile recovery in the world's biggest economy.
"Mann International" analysts believe that the Fed will come down on the side of supporting the economy through its recovery and sacrifice the dollar whilst enduring a period of inflation.
A source close to the form said that the time was at hand for the Fed to nail its colors to one mast or the other and that the decision could send the clearest signal to investors as to the future of the US dollar and the price of gold.
As such, "Mann International" said there was no change to its standing advice to clients: buy gold, buy silver.