Gold Slips in Tight Range But Monetary Outlook “Rarely More Bullish” as US Debt Grows $21bn, IMF Warns of Eurozone “Capital Flight”
After cutting East Asian and European growth forecasts sharply this week, the International Monetary Fund today warned that the Eurozone could see capital flight of $2.8 trillion unless the region’s leaders “act swiftly to restore confidence.” Ahead of Wednesday’s $21 billion auction of new US debt – part of $66bn in fund raising due this week – Treasury bonds slipped, nudging 10-year yields further above 2.0%.
“The industrialized world is stuck in a severe debt and growth crisis,” says Andrew Bosomworth, head of portfolio management in Germany for US bond-fund giant Pimco, quoted by German news magazine Spiegel. “Central banks are fighting the disease with monetary infusions of previously unknown proportions, and the side effect is a slow but dangerous devaluation of money.” “Gradual inflation has a numbing effect. It impoverishes the lower and middle class, but they don’t notice.”
Writing in the Irish Times, “The monetary environment has rarely looked more favourable for gold,” says economic analyst and consultant Charlie Fell.