Gold vs the US Debt

Gold vs US Debt Chart

This is an interesting chart. Not only does it show graphically the fact that the Fed is increasing the size of its balance sheet by buying Treasuries in order to make up for the loss in foreign participation, but it shows the concomitant correlation of the price of gold. The orange line shows the projected growth in the Fed’s balance sheet if it just maintains the existing QE policy.

The red line shows the trajectory of the Fed’s balance sheet if it implements the highly telegraphed next phase of QE. Everyone can draw their own conclusion as to the expected trajectory for the price of gold under either scenario.

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