Strategist: World On The Verge Of Great, Great Depression And The Fed Knows It

Gold spikes on grinding economic halt, coming Fed QE3

A notable market strategist has told CNBC that the world is on the verge of the largest financial meltdown in history, warning that Wall Street is at a loss as to what to do regarding the ailing economy.

“Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything,” said Peter Yastrow, of Yastrow Origer. “We’re on the verge of a great, great depression. The [Federal Reserve] knows it.” the futures trader added.

“What we’ve got right now is almost near panic going on with money managers and people who are responsible for money,” he said.

Meanwhile, gold spiked today on the news that a third round of so-called quantitative easing on behalf of the Federal Reserve is in the works.

“There’s a lot of iffiness about the end of QE2 and questions about whether there will be a QE3,” said Matt Zeman, a strategist at Kingsview Financial in Chicago. “There’s a serious soft patch in economic data, and the Fed is not going to be able to raise interest rates anytime soon. That’s going to be a dollar negative and gold positive.”

Gold futures hit a four-week high today as the dollar slumped to a three week low and equities continued to decline.

Futures for August delivery reached $1,551.60, the highest since May 2, before dropping back to to $1,550.30, still a rise of $13.50, or 0.9 percent.

“The dollar is starting to weaken again,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “Stocks are selling off, and there’s a flight to quality into gold.”

Steve Watson –Prisonplanet.com

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