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Gold/Mining/Energy : Gold & Gold Stock Analysis
GLD 414.48+0.7%4:00 PM EST
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To: carranza2 who wrote (28010)6/4/2012 9:02:30 PM
From: GST4 Recommendations  Read Replies (1) of 29622
 
Japan chose to do QE -- they had a large savings and trade surplus. It did not stimulate their economy -- as you note. For us however, QE has taken a strange turn as a method to balance our current account deficit -- something that must happen one way or the other. If not for QE, we would have an entirely different situation to deal with -- basically we would have really high costs of servicing new debt, much as we have seen with the PIGS. In the short run we stave that off with QE -- in the long run we end up facing a much bigger problem. Japan has its own problems with an aging society and bloated debt to gdp etc. -- but they have up until now been able to carry the weight of it all because they could finance it internally -- something they probably need to face now as their savings rate plunges. For us, QE is another matter entirely -- the risks to the global economy can hardly be overstated as it involves the linchpin in the global system of finance - the dollar.
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