Aquarian, I would differ from your views. QE2 is coming to an end in June. Even if we are going to have QE3, the Fed is unlikely to start it straight after the end of QE2. Certain Fed members are turning hawkish. There is also a need to support the DAX at the 75 level. If the support is broken, USD will free fall.
Looking at all these, I believe the price of gold will be capped for the near future. Unless some events trigger the breaking of the support for DAX at 75, then gold will explode upward.
"Global stocks are mixed with the European Euro Stoxx 50 index up +0.50% and June S&Ps up +8.90 points. The dollar index slipped to a 1-1/2 week low while precious metals soared, as silver posted a 31-year high and gold climbed to a record. Expectations for an ECB rate hike at tomorrow's monetary policy meeting has boosted the euro to a 14-1/2 month high against the dollar, while the outlook for further emergency stimulus from the BOJ has pushed the yen to a 6-1/4 month low against the dollar. The expected tightening of ECB monetary policy has strengthened the euro's interest rate differentials with the 3-month Euribor rate, the rate at which European banks say they see each other lending in euros for 3 months, increasing for the fourteenth consecutive day as it rose +0.7 bp to a 1-3/4 year high of 1.269%. European stocks received a boost after Feb German factory orders surged +2.4% m/m, nearly 5 times as much as forecast. Limiting stock gains however, was th e unexpected decline in Feb UK industrial production which slipped -1.2% m/m, weaker than expectations of a +0.4% m/m increase."
I don't think gold and silver bugs' positions are necessarily distasteful.
An economic system that requires exponential debt growth to survive is pretty abhorrent to me.
ZIRP, QE1, QE2, etc. just kicks the can a little further down the road and solves nothing.
I hold physical silver as an insurance policy. If the economic system does collapse it will be because of the weak willed politicians and central bankers who refuse to face up to the problems; constantly taking the easy option in order to keep their bansker mates in the lifestyle they've become accustomed to.
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