Gold can fall a little but after it can skyrocket as Fed signals bail out of liquidity at the cost of doubling budget deficit
Marla Guthrie
Aug. 10, 2007

The credit crunch has some interesting effects on the gold market. With the stocks, the gold market has fallen during this liquidity crunch. Many are wondering will gold also crash with the stock market all around the globe.

Let us analyze the scenario somewhat. The lack of liquidity is definitely bearish for gold. But what the Federal Reserve, ECM, Bank of Japan, and Australian Central Bank did was unprecedented. They just opened their vault and said - come we will provide you liquidity as much as you need. Simply put they decided to print countless currencies.

And that is bullish for the gold market. If the Federal Governments in US and other countries bail out the situation to contain and correct the same at the cost massive bulge in Federal Deficit, gold will rise sharply.

Right now gold market is worried for the liquidity crunch but in the long run a golden age is coming for the gold market.

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Gold can fall a little but after it can skyrocket as Fed signals bail out of liquidity at the cost of doubling budget deficit
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Right now gold market is worried for the liquidity crunch but in the long run a golden age is coming for the gold market.
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