GREY:PTQMF - Post by User
Post by
wwadehammeron May 22, 2013 8:24am
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Post# 21425375
Is Gold Price Linked To Fed Easing?
Is Gold Price Linked To Fed Easing? It appears the gold price is linked to the Fed continuing qualitative easing. The price has stopped dropping based on dovish comments by two Fed Governors yesterday and the belief that Helicopter Ben will will keep printing paper money at $85 billion per month. That raises the question of what would happen to the gold price if Ben stops printing money and the U.S. Congress gets the deficit under control. The reason the gold price went so high was the expectation that easy money would cause high inflation like what happened in the 1970s. No inflation so far and many people think the inflation risk is not as great as inflation hasn't occurred after four years of Ben printing money, thus the drop in gold price. We could be in for some big drops in the gold price if inflation doesn't take off in the next couple of years. I believe that inflation will kick in at some point with Japan now printing vast amounts of money and Europeans rioting in protest of austerity. Time will tell.