Last year the Fed purchased 61% of Treasury debt. The economy is holding on by a thread and without the Fed’s Treasury purchases (QE), interest rates would be rising rapidly and the economy would be sinking. The damage would be wide spread, from real estate to the stock market, but this is an election year and the voters must not know the truth. The Fed is doing its part to make sure the current administration stays in power.
Gold is being held in check. It can’t be allowed to send the wrong signals now, can it?! These frequent “raids,” and daily “tape painting” will not succeed and will not derail the bull market. Just chill out, buy whatever you can afford on these takedowns. Time is on our side. We can count the time in months, not years. Gold will break free and slingshot silver to the stratosphere when it happens.
There are a lot of people who expect things to fall apart in a hurry. My experience tells me that this will not be the case. It will be more like a slow-moving train wreck. Martin Armstrong says the debt crisis won’t hit the US until the Fall of 2015. Sinclair doesn’t expect gold to peak until at least 2015-2016. Still, it doesn’t hurt to prepare in advance. When it comes to gold and silver, the worst that will happen by buying “early” is that you will buy the right asset at a very cheap price. My friends Andy Hoffman and Bill Holter have a shorter time line and they could be right, but my feel, for what it’s worth, is we have three to four years yet to enjoy all of this “bought and paid for” prosperity and stability. Yes, we can at least thank the Fed for that much, but don’t thank them too warmly – they are at or near the top of the short-list of those who caused the mess we are about to experience.
Be sure and read the excellent article by Eric Sprott and David Baker, “The Recovery Has No Clothes.” It really doesn’t, you know. It’s all lies and smoke and mirrors. But then deep down you really knew that (unless your name is Backwoods Jack).