With or without a December interest rate hike from the Federal Reserve, global easing measures thus far show no signs of slowing. The European Central Bank, the Bank of Japan and the Bank of England could all potentially engage in further quantitative easing measures in an attempt to boost economic activity and spur inflation.
Concerns appeared to be on the rise recently about the possibility of the ECB stepping back from its QE, although ECB President Mario Draghi put such concerns to bed this past week.
Draghi signaled he is in no rush to taper the central bank’s bond-buying program, and for now there does not appear to be much risk of higher yields in Europe luring capital from U.S. debt markets.
Draghi’s recent remarks provided some much needed clarity on the central bank’s plans from now until their next meeting in early December, several days before the U.S. Fed is set to meet.
Bank of Japan Governor Haruhiko Kuroda also expressed no immediate hurry to reduce the central bank’s asset purchases, which also likely made investors in U.S. debt feel more comfortable.
Regarding Mr. Draghi’s comments, a recent Bloomberg.com article quoted chief financial economist at Jeffries Group LLC Ward McCarthy as saying “Draghi turned the switch back on for a QE world.”
We have to wonder if the switch will ever really come off…
Although the effectiveness of low rates and quantitative easing measures can be debated, it seems as if there simply are no other alternatives. As the European and Japanese economies continue to fight deflationary forces, their respective central banks may keep their foot on the gas with regards to their easing programs.
Here in the U.S., the Fed may ease off the gas only to hit the pedal again later. That may prompt the question:” Why would the Fed hike rates only to lower them again later?”
We believe it is simply because the central bank has no other plausible options.
In a world filled with quantitative easing, owning hard, physical assets has never been more important than it is today. With QE comes economic uncertainty and declining paper currency values
With declining paper currency values comes a loss of purchasing power-your purchasing power.
Physical precious metals like gold and silver may potentially offer a meaningful hedge against falling currency values and economic turmoil. If you do not own physical gold or silver, now is the time to consider adding these key assets to your holdings.
And it’s never been easier…
Speak with an Advantage Gold account executive today about the potential benefits of physical gold and silver ownership. Our professionals are here to answer your questions, and can even show you how easy it is to buy and hold these key assets using your IRA account.
Don’t wait for lower currency values and falling purchasing power to erode your financial future. Call us today at 1-800-341-8584 to learn more.Tags: advantage gold, draghi, ecb, gold, japan, low interest rates, purchasing power, quantitative easing