QE3 Will Cheapen Paper Money and Benefit Gold
Markets reacted negatively to the Spanish Bailout of a $125 billion as they keep a close eye on a Greek election this Sunday and the Federal Reserve Board meeting on June 19th and 20th. Investors feel that there is the possibility of a pandemic meltdown and that the Spanish bailout has little impact other than saving time. To avoid such a catastrophe, the Greeks may elect to stay in the Eurozone. This may effect the Fed’s decision’s on June19-20 to implement QE 3 in addition to buying 475 billions of Treasury bonds over the coming 9 months.
This may cheapen paper money and simultaneously benefit “real Money”–GOLD and SILVER both in the form of bullion and resources in the earth. Silver (SLV) and gold are forming a descending triangle for many months but has not violated 2011 lows. After QE2 we saw a massive move into silver when it outperformed gold…could QE3 be a catalyst to start something similar?