Sep 08
22
The Case For An Increase In The Price Of Gold
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As the ongoing socialization of the finance sector in the US continues the big challenge facing the Fed is to find the cash. Easy – just print more money… But that still means that someone has to buy into the proposition.
Here is an interesting take on the challenge ahead and a rationale for why it will mean an increase in demand for gold, hence an increase in price.
“The question remained: how is the Fed
going to finance these new measures especially when its balance sheet
was deteriorating as rapidly as the balance sheets of many of the Wall
Street investment banks. Answer. The Treasury announced $200 billion in
special bill sales to help the Fed expand its balance sheet from $800
billion to $1 trillion. We are confident more sales on behalf of the
debt are likely to follow.
going to finance these new measures especially when its balance sheet
was deteriorating as rapidly as the balance sheets of many of the Wall
Street investment banks. Answer. The Treasury announced $200 billion in
special bill sales to help the Fed expand its balance sheet from $800
billion to $1 trillion. We are confident more sales on behalf of the
debt are likely to follow.
New
debt sales meant that the Fed and Treasury are willing to create money
out of nothing, beef up their finances and then infuse this extra cash
into the faltering financial system. No measure would be spared and bad
debts created by years of excess money supply will once again be
monetized by newly borrowed funds”