-->ALLAS, Nov 19 (Reuters) - Two back-to-back quarters of strong U.S. economic growth have diminished the risk of deflation, Dallas Federal Reserve President Robert McTeer said on Wednesday.

"Whatever the danger, it was less now than it ever was," McTeer said in a speech to a Dallas Fed conference.

U.S. gross domestic product surged at a sizzling 7.2 percent annual rate in the third quarter, building on the second quarter's 3.3 percent advance and boosting speculation that the economy had finally turned a corner after the 2001 recession.
Die Versuchung, die rote Lampe einzuschlagen ist enorm, wie anders soll
man dem Volk die immerwährende Deflationsnummer verkaufen können..


McTeer, who is not a voting member of the central bank's rate-setting Federal Open Market Committee under this year's rotation, also said increases in productivity have forced companies to cut costs, which may have led to job reductions.

Addressing the recent rise in gold prices, McTeer said he had heard of an index under which Fed policy could be seen as too tight if the price of gold were at $300 an ounce and too easy at $400 an ounce.

While McTeer did not say whether he agreed with the index, but said:"Gold is putting off some cautionary signals right now."

Gold briefly burst above $400 an ounce on Wednesday for the first time since 1996, as global security fears elevated the precious metal's safe-haven value and the dollar sank to record lows against the euro before recovering.