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This is a question that nearly every investor regardless of whether they are investing in gold, silver, other commodities, or the stock market are asking.\u00a0\u00a0 Many economists have predicted from the beginning of the year that we would at least see one more round of QE if not more.<\/p>\n
Up to this point, the Fed has made several statements, which have been considered negative towards the short-term precious metals outlook.\u00a0 They stated last month that the economy was doing better than they expected.\u00a0 This small statement caused everyone to think that no QE would be forthcoming for the foreseeable future.\u00a0 However, the Fed\u2019s track record for communicating clearly is not that good.\u00a0 Look at the major press releases for this year so far:<\/p>\n
If that\u2019s not confusing communication I don\u2019t know what is.\u00a0 The latest comment from the Fed is positive towards precious metals.\u00a0 Two major movers in the investment community came out this week stating they believe more QE is on the way and it will be here soon.<\/p>\n
First, Goldman Sach\u2019s Jan Hatzius came out and said that more QE(at least $500-$750 Billion) will be forthcoming as early as next month or no later than June.\u00a0 The stated reason for their belief was \u201cThe improvement might not last.”\u00a0In other words,\u00a0unless the “economic improvement” is guaranteed in perpetuity, the Fed will always ease.\u201d \u00a0\u00a0Goldman Sach\u2019s has\u00a0 influencial people working at both the Federal Reserve and also at the US Treasury and have a better outlook than potentially any other mainstream financial institution on QE.<\/p>\n
Also Pimpco\u2019s Bill Gross came out and stated in an interview question about QE that\u00a0 \u201cI think there has to be Dan.\u00a0 I believe there will be a QE3 and perhaps a QE3 and QE4.\u201d\u00a0 Pimpco currently manages the largest bond fund in the world and Bill Gross has made good decision after good decision when it comes to market timing over the years.<\/p>\n
There is one final reason that suggests that QE3 is likely to come sooner rather than later.\u00a0 This year is an election year and the powers that be have a very strong incentive to keep things stable for the time being.\u00a0 The only way they have historically been able to do that is through QE.\u00a0 Therefore it is imperative that they inject QE3 soon in order to allow its affects to rivet through the market so they can get the full benefit in the 2012 elections.\u00a0 However QE is like a drug.\u00a0 Each time the United States takes it, it takes more and more QE to have the same effect.\u00a0 Eventually the US will overdose.<\/p>\n","protected":false},"excerpt":{"rendered":"
This is a question that nearly every investor regardless of whether they are investing in gold, silver, other commodities, or the stock market are asking.\u00a0\u00a0 Many economists have predicted from the beginning of the year that we would at least … Continue reading