The Fed’s Ultra-Wussy FOMC Statement

Right now investors face a V-shaped-recovery theme at home and the serious debt troubles plaguing Greece, Spain, Portugal, and perhaps other countries in Europe. According to reports, the IMF/EU financial-rescue package is now approaching $800 billion. Will there be contagion? That’s the billion-dollar question.

And will Germany sign off? No one knows for sure. I think it probably will. But what I’m really interested in here is whether there’s going to be strict conditionality attached to this bailout. The socialist Greek government cannot be trusted. It may very well turn around and spend the money.

But let me echo another thought. Distinguished investor Ken Heebner told CNBC on Wednesday that the increasingly strong U.S. recovery is independent of Europe. I totally agree. So stock market investors should keep their eyes on the V-shaped recovery. So far, this includes a 76 percent increase in first-quarter operating earnings for the S&P 500. That is huge.

On top of that, we’ve been witnessing big ramp-ups of retail sales, industrial production, and business investment spending.

Now, I do acknowledge a recent jump in gold prices. While the precious metal shed a few bucks today, it did rise to a year-to-date high of $1,167 yesterday. I believe gold could be a warning signal and currency substitute in a world of excess spending and debt. It also could be saying that global central banks — including our own Federal Reserve — are too weak-kneed in taking back their massive money-printing.

Is gold saying, “A pox on all your houses”? “You’re all Greece now”? Perhaps, especially in light of the Fed’s ultra-wussy FOMC statement this week. It totally ignored booming commodity prices and the V-shaped recovery. The Fed still refuses to offer any sign whatsoever of an exit strategy from its ultra-easy, free-money policy.

What do I want? I want a dose of cowboy monetarism. I want to see the Fed, for once in its lifetime, surprise Wall Street traders by pulling the trigger just a little bit faster. It ought to take a cue from Kansas City Fed head Tom Hoenig. Of course, Mr. Hoening dissented once again. It’s time to cowboy up.