Recent talks amongst the birds and moles of the financial industry have all been about more quantitative easing from the Feds. The Federal government has made numerous inuendos pointing to more US currency being injected in to the economy. Making the point many times that they will do whatever it takes to avoid a double dip recession. Their stance being fueled by jobs numbers, stagnant if not lower housing numbers and sluggish economic growth patterns.
Based on the fact that there is plenty of cash in the system now, more quantitative easing seems like it would only devalue our US dollar even more. This is due to the fact that all the cash that is out there now is not moving. Companies and individuals are sitting heavy in cash, unwilling to part with it in this uncertain economic environment. With an interest rate anchored at almost 0% for the moment, inactivity with cash reserves has no real downside, just borrow more cash at this low rate and work with the borrowed funds.
Gold is safer than paper currency. Gold is real money and can not be mass produced. It has to be found, mined and refined. The possibility of more money being printed makes the argument for gold even stronger. With gold and silver reaching new highs this past week, highs for silver that have not been reached since the 80’s, signals a bull market in precious metals, especially gold, closing around $1275/oz Friday.