Certified Gold Poised to Rebound on Fed Tapering Posted by James Randolph on December 19, 2013
The Federal Reserve announced today that it would eliminate $10 billion per month of its current bond-buying program in its first official tapering move since quantitative easing first started 7 years ago, and the certified gold market responded positively while paper markets fell back. Gold prices did retreat slightly in the early afternoon but analysts seem to be in agreement that the damage has been done.
The Fed’s decision to initiate the end of QE means it will only be a matter of time before the full $85 billion in monthly bond buys is eliminated and interest rates start to climb. Numerous economic experts, including incoming Fed chair Janet Yellen, have said that the U.S. economy does not appear ready to ride without training wheels.
Real unemployment is higher than 10% nationwide by some estimates and higher interest rates will likely cause corporate America to cease a lot of the expansion and hiring that has taken place in the last couple of years thanks to 0% interest rates. Economy hawks that until now have only been able to talk about how the majority of newly created jobs are low-wage or part-time can now pile on because the Fed’s $10 billion decision today is a symbolic move that could have $10 trillion consequences in a few years.
Certified gold coins’ long-term viability as investments could be stronger than ever now that the Fed has its back against a wall. A toxic concoction of higher interest rates, fewer corporate freebies and an overprinted dollar could serve as the backdrop for the next gold confiscation, so the decisions made by the White House and the Fed in the next few months will be key in determining when, NOT if, the house of cards comes crashing down.