Thursday, March 14, 2013

More on gold

I apologize for the overkill on gold, but a few more exhibits....

Forward expected inflation remains below the Fed’s target 3% rate, implying Bernanke has leeway to keep his foot on the pedal regarding QE. Fears of him taking away the punch bowl anytime soon are overblown.

Source: Bloomberg

From the looks of the Fed balance sheet, which continues to expand, Bernanke is indeed pressing down hard on the pedal.

 Source: Bloomberg

We know historically gold has significantly higher returns when real interest rates have been negative, which remains the case today.

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