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June 12, 2012 / Jeb

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?

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