RE: Much of the price increase is due to QE1 and QE2.
So, with QE2 just about to end pretty soon, do you think that Silver prices will retrace downwards a little? Maybe so.
But then we have this 1.6 Trillion dollar deficit we have to fund which the feckless Republicans only fought to trim by a mere $38 Billion.
The obvious question is this -— where are we going to get the rest of the money if we don’t borrow more? (this Congress thankfully isn’t going to raise taxes and with the Bush tax cuts in place until end of next year, new Fed taxes are not in play ).
So, the only two weapons left to fund the 1.6 Trillion deficit are to borrow and print.
Therefore, I can’t see why there would not be a QE3 and of course more devaluation in the USD and (unfortunately for those who are not into precious metals), the continued rise in Gold and Silver prices.
The scuttle butt I heard was the Feds might raise interest rates a bit (1/4 pts max) just to assure the markets and hopefully stabilize the dollars fall. The Fed also has made some money on its toxic assets, mortgages and loan repayments and will not withdraw that money from the system. Rather it will be used to buy more T Bills. The remaining shortfall will be met with a mini QE (QE3) which will be disguised in another name. June is going to be an interesting month. What will kill us is the overseas higher interest rates will attract money and leave us with very little capital to work with. Definitely there will be more inflation.