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Country
1000+ Penny Miser Member
USA
3121 Posts |
 Posted - 10/09/2009 : 20:01:40
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I suspect that there are simply not enough buyers to fund multi-trillion dollar new Treasury issues and the Fed's Quantitative Easing program is acknowledgement of this reality. So the Fed is stepping in to buy US debt as needed to keep yields under control.
Gold is responding as a monetary asset to this currency debasement and the previously unimaginable levels of stimulus which should translate into much higher inflation. Warren Buffett predicts that inflation will exceed the levels we saw in the 1970s (which ran over 20% per annum). Alan Greenspan is concerned that inflation may swamp the bond market.
On the other hand, in 2008, despite record gold prices, gold production fell to a 12 year low!
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