Signs of change are shown in every aspect of the economy. The recent panic on the floors of the stock exchange, as the Dow Jones Industrial Average plummeted into the most powerful nosedive marked an inability to launch new programs to buttress the world economy. Last year, to prevent a double-dip recession the Fed had opted the QE2 to save the stock market. Now with the downgrade that was not only a significant blow to the US economy and reputation, it has increased the borrowing costs making bonds more risky.
Should the Fed have to turn on the printing machine to avoid a hard economic recession, is the question awaiting answer today. Consensus is that the US government has no choice. Will it happen? Do children like Christmas? However, it will have a worse affect than the previous QE’s. With a poorer economy today, the country will have a higher inflation, higher unemployment, and higher borrowing costs for average Americans. Not to mention that a QE3 will be a potential and final death to the stock market and the US dollar! But as choices are limited where the US can reach for help, US finances have gone from sustainable to unsustainable mess with the dollar further slumping.
The debt ceiling decision might have sealed the fate of America and plunged the recent stock market historical crash. With all the continent’s government debt problems worsening, the devaluation of the dollar is pushing gold sky high. As the economic weakness continues, the turmoil in Europe has become an impossibility to restructure, and today, its totally out of control. Coupled with US weak earnings and unemployment increase, any new shock will further pull the economy’s outlook into deeper hole. “This has important implications for anyone who holds dollars in their portfolios or bank accounts. Investors are wise to keep investing in gold . We at Regal Asset with an ethical Team of Precious Metal Experts will help you get out of the dollar and escape the volatile U.S. and global markets.”
Expecting less hope and worse change in global economy, sophisticated investors are rallying for the safety of gold . While lending to countries today involves a huge risk, Europe is forcing banks to limit lending, thus curtailing governments for International credit. The consensus is, that the centralization in fiscal policy will be the only survival for the Euro. “With the feeble attempt for recovery both in US and global economy the added shocks that hit the economy sent gold soaring $61.40 to settle at $1,713.20 on Monday and by Tuesday reaching a record high of $1,742.40 per ounce during the day”, says Regal Asset Team of Analyst, adding, that it is “still, adjusted for inflation, an ounce of gold remains below its 1980 peak of $850, which translates into about $2,400 in today’s dollars. A future series of other downgrades required by the move on the U.S. sovereign rating will almost certainly push gold further.