Why Gold Always Goes Up In The Wake Of Quantitative Easing

Quantitative Easing … what the heck is that?

In addition to being typical economic jargon designed to obfuscate and complicate the real truth of the matter, Quantitative Easing (QE) is the surest and quickest way to debase a nation’s financial integrity and devalue its currency.

So why do they do it?

Why have Obama and Bernanke colluded to further devalue the US Dollar?

They do it whenever all else has failed, as it did in 2008 and 2010. Now here we are in 2012 and it’s time for QE3, just in time for the notorious September triple witching hour, as well as the November presidential election.

Quantiative Easing timeline QE1 and QE2

You see, the FED (aka the Federal Reserve), really has not a clue about what to do. This is because you cannot fix a problem (actually a multitude of both structural and systemic problems) of this nature when the entire foundational financial paradigm is so profoundly and fundamentally flawed. In reality the global economic and financial architecture has been constructed on quicksand. Therefore, the countless Pyramid and Ponzi schemes are all collapsing and coming apart at one time. And why shouldn’t they, when something so basic to their model as the residential and commercial real estate markets have crashed. As has the stock market, the municipal bond market among others.  

They can’t prop up the real estate market as easily as they can blow air into the stock market, however. Equities and bonds can be artificially manipulated in any direction they want to produce a false impression. And so they do … every business day of the week. Do you notice how Friday is virtually alway engineered by these financial engineers to end on the upside from the previous day? In this way, the ‘good news’ will sit there for the weekend, which further artificially reinforces that the markets are doing just swell!

Which is why gold always goes up during a period of Quantitative Easing.

Do you ever wonder who comes up with these ridiculous economic terms? Truly, the PhD economists of the New Millennium are no different than the Wizard of Oz; actually, they’re much more adept at conjuring up illusions as they have proven to be immensely successful at misleading whole nations, entire markets, vast sectors of the global economy and the world-at-large. Now that’s pretty good!

Which is precisely why gold consistently went up during QE1 and 2, as it will during QE3. There are those among us market analysts who are a little more savvy than the economist simply because we have not lost our common sense. We know that gold does possess a high level of inherent value — always has, always will. Therefore, when the international reserve currency of the largest national economy (aka the US$) is transparently being devalued, there is only one place to go — to the hills where gold and silver and platinum can be found aplenty. Perhaps this will shed some light on the massive and unprecedented strikes, killings and general mayhem surrounding the platinum and gold mines in South Africa over the past few weeks.

Can you imagine that the state of SA actually charged the miners with murder after many of their own were killed by state police? Now you see the extraordinary pressures to mine everything of value? The new mantra – “Get it out of the ground –> YESTERDAY!” Because the time is coming shortly when the fiat currencies of the world will be worthless.

GRAPHIC: Gold’s 111% rise from QE1 to QE3

Source: MINING.com

While it appears that there is no way out of this mess for the FED, there is, but it comes at GREAT expense to the status quo. And, they will not have it that way. The FED would rather protect the very few – much less than 1% by the way – than carry out the necessary structural changes that might prevent the upcoming financial apocalypse. To repeat, the FED would rather serve the interest of their masters, and forgo the direly needed systemic reforms, than protect the wealth of nations or the assets of small businesses and the common man.

Which is why gold will always go up during times of QE.

Many of the artificially inflated, fiat currencies throughout the world will soon be worthless given the current trajectory of fateful decisions made the FED, as well as by many of the other central banks such as the European Central Bank.

All the brokers who work for the many Wall Street and City of London firms know the deal. Although they invariably send mixed signals to their buying customers, at the end of the day, they know that the flight to gold always means one thing and one thing only. That both the government and the banks are in trouble – BIG trouble – and in desperate need of yet another bailout. Bailouts, which not only have served to effectuate the largest redistribution of wealth in history, but have also taken the capital away from those who need it the most in order to jumpstart the global economy.

Which is why gold is now back up to $1771 (as of Sept. 15th — the anniversary of the Stock Market Crash of 2008) and climbing!

State of the Nation 2012
September 15, 2012

Author’s Note:
For the duration of the present global monetary meltdown, there is a economic axiom that is well worth understanding. And acting upon, if possible.


“During times like these,
the financial kingdom takes on a new order of rulership:
Gold is King.
Silver is Queen.
Platinum and Palladium are Prince and Princess.”

©2012 State of the Nation 2012
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