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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Best of Howard Ruff
June 27, 2011
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Refresher Course

Quantitative easing (QE) is a form of monetary policy used by central banks to increase the supply of money in an economy when the bank rates are either at, or close to, zero. It is really described as printing money. This electronically adds money to the central banks in a nanosecond.

A central bank does this by first crediting its own account with money it has created out of thin air. Then it purchases financial assets, including government and corporate bonds from banks and other financial institutions in the open market.

This gives banks the excess reserves required to create new money. The increase in the money supply supposedly stimulates the economy. But if the banks simply pocket the additional cash it could spur hyperinflation.

"Quantitative" refers to the specific quantity of money being created. "Easing" refers to reducing the pressure on banks. QE was used in Japan during the early 2000s, and the United States and United Kingdom during the global financial crisis of 2008–2009.

“Quantitative easing has become a favorite tool of the Fed in the last few years. Trillions of dollars have been added into the economy with no recovery to speak of. The banks which have kept the money to help their balance sheets only make the banks and bankers very wealthy.

What if QE Stops?

If QE were to stop right now, the general equity markets would collapse. Silver and gold would go down. The stock market would be hit hard. The dollar would go up slightly in the beginning, but would fall again as the government would do its usual mismanagement, making the whole process ineffective and inefficient.

Government can’t stop quantitative easing now. The stock market would return to its recent lows or lower and there could even be an economic implosion. Like it or not, we’re tied to this monetary stimulation. Attempts to stop it would take the central banks right back where they were before QE1 and QE2 – on the verge of collapse.

If QE continues, gold and silver could have a very nice run up this summer. Most summers are rather quiet in the metals, but don’t count out the possibility of a nice summer rally. We just have to watch and wait, but you might find the price of silver and gold to be above your wildest expectation.