gold, page-82782

Analysis of quantitative easing (money printing) has shown that it:
1. Has an immediate psychological impact where the market anticipates flows into stocks and other assets such as gold.
2. The new money gets stuck in the banking system and other economic pipes for 6 to 12 months when a second wave impacts as new money looks for a home that can earn a return and speculate.

Gold is an insurance policy against risk and inflation / currency devaluation. But investors are not just focussed on the immediate. They are forward looking so short term falling prices in some areas can be outweighed by the longer term worries about next year and beyond. Well, there are biblical flood levels of printed money coming down the streams towards various asset classes right now. The lag effects of QE
means we are just seeing the early stages of the flood.

The wild card is that countering gold and silver's price rises and their use as money or a reliable store of value is something central banks have made a priority for a century. But they may let it rise for a while. They may struggle to contain it as pressures get too great. Imbalances in relative gold holdings across countries are seen as particularly undesirable and so if the balances around the world are okay in their eyes, controlling price growth may be less important. Many elite may want to make a quid first from a big rise then smack it around. Fiat money and partcularly electronic money has become so dominant that they may not see gold or silver as the threat it used to be.

Gold could do a bitcoin and go parabolic with all the forces at work. And as with bitcoin, the elite might let it run and then throw out the lasso to bring it under control.

In sumnary the forces are upwards and it is early days. It could go crazy. But there is plenty of uncertainty.