However, central bank bond purchases and record low induced interest rates are the current foundation of the “recovery.” Recent reports indicate that the Federal Reserve purchased 61% of the government debt issued by the Treasury Department in 2011. Since 2008, The Fed has purchased more than $2 trillion of bonds in two rounds of quantitative easing.
Despite what economists predict, investors are less confident that the Fed will restrain from further bond purchases in order to prop up the economy. According to a Citigroup survey released on Thursday, almost 45% of respondents said they did not expect the Fed to initiate more quantitative easing, down from 60% a month earlier. “The data has been a bit softer, especially the recent payrolls number,” said Neela Gollapudi, a New York-based strategist at Citigroup, according to Bloomberg. “The strength of conviction that there was going to be no more QE at all would be less now than when it was in March, when everything seemed to be going very well.”
Surveys continue to debate whether or not the Fed will provide additional easing, but gold and silver, the time tested safe-havens of the world, wait patiently as the inevitable devaluation of fiat currencies take place around the world.
If you would like to receive professional analysis on equity miners and other precious metal investments, we invite you to try our premium service free for 14 days.
Disclosure: Long EXK, AG, HL, PHYS
To contact the reporter on this story: email@example.com