The central bank driver world macro structure is in full can-kicking mode. The fuels that have built up are almost too numerous to mention, though some issues continue to be recycled as if they were needed to explain the latest potential spark.
Even after five years of the Fed’s most aggressive accommodative policy in history, there is still a lack of hoped for quality credit creation in the economy, which could be a sign that the greatest deleveraging of the U.S. economy since the Great Depression is still not complete. The Fed’s unrelenting dovish policy appears to support this concern.
Adrian Day likes to think long term, and historical trends persuade him that the bull market in gold should continue for years to come. Here, he explains why he expects a significant gold price recovery in the near future.
We might well be about to see the gold price take its first weekly fall since Christmas, as bears get over-excited about Fed tapering and emerging market troubles ease off, prompting the yellow metal to lose some of its safe-haven appeal.
As governments try to boost growth with a weaker currency, low inflation may eventually turn into higher inflation when monetary debasement continues. When a local currency devalues, gold prices in local currencies typically shoot up as local citizens scramble for an alternative currency to protect their wealth.
Thanks to the Fed's tapering, a wider public is becoming aware of currency instability in diverse economies, from Turkey to Argentina, and India to Indonesia. Indeed, on Tuesday night Turkey raised overnight interest rates by a whopping 4.5% to 12% in an attempt to stop a run on the lira.
Chinese consumers, including those from the Mainland, are snapping up more golden horse accessories and gifts this year compared to last year's golden reptiles — snakes are viewed as both malevolent and divine by the Chinese.