Economy is a tricky area – it is hard to find the general balance but possible to find one's own pocket balance.
Experts believe the Federal Reserve could step on the gas pedal driving up gold prices to $5,000 sooner than later. How could that happen? What would be the profit for gold owners?
Deflation is close on the US Federal Reserve's heels threatening governments with bankruptcy, that is to say, a possible new world recession. To avoid this, the Fed has to increase inflation and thus reduce the real value of government debt, apart from other benefits.
What measures has the Fed taken to fend off deflation? For 8 years the monetary policy has included the printing of nearly $4 trillion, lower interest rates to nearly 0, a monetary easing plan under the name of “Operation Twist”- all of which have resulted in a resounding failure.
What could be an infallible technique? Experts estimate that a rise of gold prices up to $5,000 could be effective in just 15 minutes. A high gold price would devalue the U.S. dollar by 80% setting off a domino effect in market prices.
This technique has been proven effective several times along U.S. history. The deflation during the Great Depression was ended when Franklin D. Roosevelt increased gold prices by nearly 75%, giving way to a period of economic growth. Other case took place in 1970 when Richard Nixon increased gold prices by 2,200%.
According to Jim Rickards, gold market expert, this increase of gold prices is anticipated, otherwise it could be truly difficult to ward off deflation. Come what may – high deflation or inflation – gold still outperforms other asset classes being a safe bet for every buyer.
Keep abreast of developments in the gold market on the official Global InterGold website: www.globalintergold.com
