Los Angeles – The price of gold rose for a fourth consecutive week on Friday gaining 1.51 percent, to $1,408.00 an ounce on continuing unrest in the Middle East and North Africa, and renewed fears of rising inflation. Silver prices rose 2.46 percent, to close at $33.31 an ounce for the week. The price of Gold has gained 4.93 percent or $66.20 and the price of Silver has gained 16.67 percent or $4.76 in February. The Gold/Silver ratio fell to 42.26, a 13 year low, as silver outperformed gold.
Political protests continue to unseat deeply entrenched leaders in North Africa and the Middle East, first Tunisia’s President Ben Ali fell, then President Hosni Mubarak of Egypt was forced to step down, now the unrest is threatening the grip of autocratic Libyan leader Colonel Muammar Gaddafi. “There’s been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse,” said Robert Baer of Time.com.
“Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. The sabotage, according to the insider, is meant to serve as a message to Libya’s rebellious tribes: It’s either me or chaos.” Muammar Gaddafi’s son Saif al-Islam told Turkish news channel CNN-Turk, on Friday that his father’s government, while fighting to put down the insurrection, would never resort to destroying Libya’s oil wealth.
In the U. S., Charles Evans, President of the Federal Reserve Bank of Chicago, in an interview with the Financial Times on Wednesday, stressed the importance of continuing the Fed’s current accommodative monetary policies. While Evans did not specifically call for a third round of quantitative easing (QE3), he hinted at such a move when he said, “The message that comes out of what I think of as high-quality research on this subject is that policy ought to remain accommodative for really quite a while, even a while after conditions start to improve.”
Evans continued by saying that “While I’m very pleased at the improvements in the economy I think it’s going to continue to be a while before we’re safely past these conditions…The real question is: what is the likelihood of an outsized, extended increase in consumer spending? They continue to be less likely than you would hope for during a strong, vibrant, robust recovery.”
The countdown has begun to a possible shutdown of US government offices this week. Lawmakers must pass a funding extension by March 4, or the government will shift to performing only essential operations. Since each federal agency prepares its own “shutdown plan,” it’s difficult to predict how each government entity will respond to a shutdown should lawmakers not act in time.
Republican House Speaker John Boehner, on Sunday, said lawmakers were planning to pass a short-term bill that would keep the government running. Even if the short-term fix is passed by the Tea Party Republicans in the House, the Democratic controlled Senate may not be able to act in time to keep the lights turned on.
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