Skol, a warning sign that interests me is that US government...

Skol, a warning sign that interests me is that US government deficit spending, a key component of quantitative easing, has all but pulled back. This has been followed by a deterioration of US employment and currently the market appears to be taking the view that quantitative easing, the stimulus meant to jump start the economy, only appears to be effective while it is undertaken. This ineffectiveness instils fear in the market at a time when the Fed appears to be powerless to further stimulate the economy because the cash rate is at zero. This leaves the market in the vulnerable position of paying off today's debt with a rate that could quite possibly exceed what they may not be able to afford in the future. I think the longer the market is complacent with a zero cash rate the harder it will be to wean the market off of zero rates and the greater the risk. Add to this the very real risk of the US balance of trade eroding the US financial system and I think it is easy to see why gold has been growing in favour. However, please do not feel threatened by the latest rally. Goldbugs did not create this mess. Goldbugs sell relief from fear and turmoil.