In New York, the yellow metal is still changing hands above $1200 an ounce, or nearly double the levels that prevailed five years ago. Intuitively, one could expect that the Gold Investment market would thrive in an environment of near zero-percent interest rates, coupled with massive monetization of government debt by central banks, and bailouts of the banking oligarchs.
The US Treasury issued $165 billion of fresh debt during July, and so far in the first 10 months of fiscal 2010 (ending Sept 30th) the shortfall has totaled $1.17 trillion. July's deficit marked the 22nd straight month of red ink for the US government, the longest string on record. If the US economy slips into a "double-dip" recession, it could weaken tax revenues. Thus the Fed's sleight of hand, announced last week, in shifting maturing debt in mortgage-backed bonds into Treasury bonds.
