QE3 Is Good For Physical Gold And Silver
September 14, 2012
By James O'Dell
Los Angeles, CA. – Morgan Gold - Gold and Silver bullion prices have accelerated higher this week after the Fed's launch of QE3, with the price to buy Gold currently at $1,773.30 an ounce, and the price to buy Silver at $34.49 an ounce, as the Fed's latest iteration of quantitative easing appears to be its most aggressive since 2008, and this is due to fact that it's open-ended. “The U.S. is going to be printing money at an even faster pace than in Europe,” says James Cordier, of Liberty Trading.
The Fed’s latest plan is to buy $40 billion of mortgage-backed securities (MBS) each month until the economy improves and the Fed sees “sustained improvement” in the labor market. Mike Stojsavljevich, Managing Partner at Episteme Advisory Group, in a note, reminds us that "Any expansion of the Fed’s balance sheet is a devaluation of the dollar. In this case $40 billion a month is a large expansion annually or $480 billion in MBS. Additionally remember that Operation Twist is still in effect on purchases of treasury bills, which may add another $45 billion monthly."
Even when Operation Twist expires at the end of 2012, the central bank will begin outright purchases of U.S. government debt, according to Ethan Harris, of Bank of America Corp., author of “Ben Bernanke’s Fed: The Federal Reserve After Greenspan.” But Bernanke says he’s not worried about the economy “overheating any time soon,” he does, however, warn that the economy remains vulnerable to the looming "fiscal cliff," due to arrive on January 1, when $600 billion worth of tax increases and spending cuts will automatically take effect. "Bernanke has put the pedal to the medal," said Mr. Stojsavljevich, "But this is very good for Gold."
Meanwhile, no one knows how far the current rally in precious metals may go, but Janet Mirasola, of R.J. O’Brien & Associates, cautions investors that “a combination of short covering from those betting on a less-than-expected result and a good amount of new money added to the risk basket could see global asset values run away from fundamentals.” Protect your wealth and your retirement, during these times of economic and geopolitical uncertainty, by investing in physical Gold and Silver bullion.
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