A comparative look at the gold chart and timing of the introduction of QE1, 2 shows gold soaring to record highs (look up the dates of QE, then gold chart).
Presumably this (QE) was supposed to produce inflation, hyperinflation, 1923 Weimar style, which was deliberately generated to ease the burden of Versailles Treaty War reparations to France and UK, theteby destroying the savings of the middle class , and with it the middle class, and with that, any hope for democracy, leaving only the communists and ultra right wing parties to fight it out. We saw what happened . Germany remains wary, paranoid of inflation to this day, based on that destructive experience .
Gold , the traditional "safe haven" against inflation, soared to new highs in 2011.
But there was no hyperinflation , nor even inflation . Not to this day. The Fed refuses to hike until its target inflation rate is met.
Everbody was wrong.
Ooops! BIG Oops.
Is anybody surprised gold then fell 45% when this massive error of flawed expectations was recognized ? Today at Q3/ 2010 levels.
I think this is a reasonably credible explanation, one that I just stumbled upon reviewing the introduction of QE, especially in US, and gold price rise and fall in that period.
Much can be learned from a little economics, history, price charts that correlate the two, and above all, human nature . ...and above all that, human folly and its foibles.
Above all...adherence to the various conventional economic orthodoxies and received wisdom....which are always conventional , but rarely wise.
JMO, and worth exactly what you paid for it.
But the analysis seems to jive with reality.
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