Gold, Silver and QE
The Federal Reserve has two mandates: to keep inflation in check and to promote maximum employment. But what if different actions are needed to accomplish these distinctly different goals? You can't have your cake and eat it too. While quantitative easing may have helped spur some growth in the economy (which I doubt), the longer-term ramifications are for much higher inflation than the Fed currently anticipates. The argument is that it can unwind and, if the timing is correct, this can be avoided. But with the Fed's record, I am skeptical.
My view is that that the longer-term ramifications of the Fed's stimulus action will result in a bull market in metals for years to come. There are market dynamics that affect gold and silver outside QE, but I thought it would be interesting to see the price action around the time of the three QE announcements. So let's look at the three to six months leading into the three rounds of quantitative easing to see how gold and silver have fared. ...279 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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