“It is difficult to ignore the long-term inflationary impact of the recent dramatic increase of our monetary base. The Fed will eventually be forced to put on the brakes and mop up this liquidity through higher interest rates, but it isn’t the most pressing concern,” Morningstar analyst Abraham Bailin writes in a profile of Market Vectors Gold Miners.
“The Fed has no choice but to do all it can to preserve stability of our financial markets and worry later about the consequences of its policy,” the analyst said. “By pushing broad antideflationary monetary policy, the Fed introduced vulnerability to dollar debasement in addition to longer-term inflationary pressures.”
Market Vectors Gold Miners
Full disclosure: Tom Lydon’s clients own GLD.