The New Recession? Gold Soars on QE3 talks, Inflation

Los Angeles, CA – Despite an 11th hour decision on Tuesday to raise the U.S. debt ceiling to avert a default, many believe the lackluster results of this decision on the economy may result in another recession. Wednesday the stock market was down sharply, causing economists and financial analyst to speculate that possible solutions to the sputtering U.S. economy are a quantitative easing (QE3) and/or inflation.

In response to the debt ceiling decision, financial commentator John Carney stated, “it should be fairly obvious …that our attempts to repair the economy have failed. We’re in the second great contradiction (where) fiscal stimulus, bailouts, and typical monetary policy won’t work”.

The lack of confidence in the U.S. to handle its debt is a sentiment carried not only by U.S. analysts and investors, but global financial authorities as well. Wednesday marked the downgrading of U.S. credit rating by China’s Dagong Global – down from an A+ rating to A, dropping the U.S. down to the same rating as Russia. While Fitch and Moody’s, two of the three major credit rating agencies, have agreed not to change the U.S. credit rating, Standard and Poor has yet to make a decision whether or not to downgrade the U.S. from its Triple A credit rating.

Martin Feldstein, professor of economics at Harvard University reported that due to the U.S. economy losing momentum from its initial recovery two years ago, “there’s now a 50 percent chance that we could slide into a new recession”.

The combination of poor economic outlook, inflation talks and a possible intervention of a QE3 by the Federal Reserve has caused Gold to continue its bullish run. With Gold now soaring well above $1600 an ounce on Thursday, the presumption that gold being a ‘bubble’ investment is false. “Gold has proven to be a superman investment” reporter John Carney said. In the past 6 months the value of gold has risen over $300 an ounce, making it an indispensible asset in any investor’s portfolio.

6 month summary - Price of Gold

With continued economic uncertainty, there is no better time to buy Gold; by converting paper denominated assets into gold, investors can mitigate the risk involved with the current economic instability and inflation. In addition, investor’s retirement portfolio can be secured by rolling over a Traditional IRA to a Gold IRA investment.

For more information on purchasing gold for home delivery or Gold IRA services, please contact American Bullion today to learn how you can protect your wealth from the possibility of a new recession, inflation and other outcomes that may result from the U.S. debt crisis.

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American Bullion specializes in adding gold and silver to retirement accounts. If you have a question or would like to know more about your investment options, please call American Bullion at 1-800-326-9598 to speak with a precious metals specialist.