Gold – the final bubble, page-3730

Parrot

"It won't surprise me if in coming months extreme measures are adopted in a massive attempt at reflation."

In the US, reflation requires budgetary expansion, which the Tea Party will torpedo in Congress.

The Fed will have little choice but to keep interest rates at zero and maybe launch another QE program, neither of which seems to do much to push inflation up. They will what they an do, which is keep the banking system afloat. But the broader economy will have to look after itself.

As for gold? The short term traders may drive it up a bit further, but the fundamentals are still down.