The only time people seem to be happy with the Federal Reserve these days is when there is a massive injection of money into the markets. We call these programs Quantitative Easing, and despite the official announcement of the third round there are still fundamental problems in the US employment numbers and the housing market.
Perhaps those two areas more than any others are the basis for the US economy, and when we see very little quantifiable growth in these areas, such as is currently the case, we need to evaluate our positions on the economy.
Luckily, whether the economy is good or bad there is an asset available that can store, transfer, and accumulate wealth: gold bullion. Gold has an inherent value that is fundamentally predicated on its scarcity in society. This is why gold has been treasured through the ages in civilizations across the planet. Gold is valued in the most diverse of cultures with absolutely no contact between each other and it is a testament to the inherent value of gold.
In times of troubles, as we have seen recently in countries like Zimbabwe, gold becomes the de facto reserve currency and the only reliable currency of exchange between people. While the currency in Zimbabwe reached hyperinflationary extremes and the central bank began printing multiples of million-dollar notes, the populace ceased using the currency at all, relying instead upon gold that was panned from the African landscape in rivers and streams.
The Federal Reserve is printing money like tomorrow came and went and we have yet to see how it will fully affect the money supply. We know from previous rounds that the money-printing will take years to fully register their effects on our economy and what we have seen so far in terms of recovery is lackluster at best.
Paper currency has always been faulty, and in this economy it is doubly untrustworthy. The wisdom and fundamental strength of gold bullion is what we come to rely on and realize in times like these.
