Dollar crash now or crash later. How long can gold be kept in the box?
Dr Paul Craig Roberts, former U.S. Assistant Treasury secretary, reckons Fed QE policy, and attempts to unwind from it, will lead to a dollar crash and ultimately an explosion in the gold price.
Monday , 23 Sep 2013
Commenting on the dollar, the U.S. Fed tapering agenda, the state of the U.S economy and the gold price makes it open season for economists, and would be economists with almost as many different views being expressed as there are commentators. But, broadly, the consensus seems to fall between two camps – those, mostly on the right, who feel that the current economic situation, and the solutions being applied are just a house of cards waiting to come crashing down and, when it does, gold will explode, while those who are mostly more left-inclined will comment that current Fed policy, tapering or no, is the only way of saving the U.S. (and the world) economy and that Ben Bernanke et al have rescued us from a recession at least as deep as that of the 1930s.
To this non-economist (an engineer by background, which does at least suggest a pragmatic outlook) both sides may well have a point. (It may also be because my star sign is Libra for which astrologists suggest that one sees both sides of any argument). However, there is little doubt that QE has been of huge benefit to some sections of the community and has, so far, been successful in warding off an economic depression. Those predicting that hyperinflation has to follow on have been put in their place – for now – but it is the haves who have been benefitting, not the have-nots with median household incomes in the U.S. no higher than they were 25 years ago (according to a new York Times investigation published last week). Indeed the NY Times findings indirectly suggest that things have actually got worse for the lower end of society, while the rich – and the bankers in particular – have been bucking the lower income trend. Indeed the NY Timers commented that standards of living in the U.S.have fallen over the past quarter of a century – and this is paralleled in other G20 nations.