Ben Bernanke has been signaling that he's getting ready to tighten the money supply. And for a student of the Great Depression like Bernanke, those warnings have particular resonance. That's because one of the criticisms of the Fed during that time was that it tightened too early.
So the Fed chaiman's statement last night implying that the central bank could raise rates in the second half of 2010 reinforced earlier Fed pronouncements about removing $1 trillion in cash from the financial system. And not coincidentally, the price of gold fell from its recent high of $1,060 down to $1,050. Is it time for gold bugs to lighten up?