There Will Soon Be a Run to Gold Like You've Never Seen Before

[Madison320]

My guess is gold pulls back a little. The Fed got their balance sheet "down" to 7 trillion and that may put a ceiling on gold for now but I don't think it will last.

I'm expecting the debt and money printing to resume in force. When we hit 40 trillion in debt and 10 trillion in QE that should send gold skyrocketing.

 

[unknown]

My guess is gold pulls back a little. The Fed got their balance sheet "down" to 7 trillion and that may put a ceiling on gold for now but I don't think it will last.

I'm expecting the debt and money printing to resume in force. When we hit 40 trillion in debt and 10 trillion in QE that should send gold skyrocketing.

How does the Fed lower its balance sheet?

 

[Madison320]

How does the Fed lower its balance sheet?

The way I understand it normally the fed sells its assets and basically destroys the money it receives.

 

[pmbug]

The Fed can also just let assets (MBS, Treasuries) run to maturity (expire) without renewing/replacing them.

 

[Madison320]

The Fed can also just let assets (MBS, Treasuries) run to maturity (expire) without renewing/replacing them.

Except in the case of treasuries I don't think the Fed can really take money out of circulation, at least not without borrowing more money. Treasuries are not an asset to the Fed because they are also a liability. So when they print money to buy treasuries it's just a fancy way of printing money out out of thin air with nothing to back it up. Banana republic style. I think it was illegal when they first created the Fed.

 

[Acala]

China buying gold at an accelerating pace while exiting the USD at an accelerating pace, is a nearly certain formula for increasing gold prices. Especially when you add the almost insurmountable obstacles to the US government reigning in deficit spending. Too bad the BRICS couldn't let go of the power of the money printer and issue a gold currency. At this point China might be able to do it on its own.