When all this began, we were reassured that extraordinary balance sheet expansion and the ZIRP environment were merely temporary and only to get us through the short-term emergency. The following chart and table covering the monetary-policy-on-steroids of the Fed, ECB, BoE, and BoJ suggests this is a long-emergency indeed… and the current disconnect between the ‘planned’ expansion of central bank balance sheets and gold suggests that Cyprus’ central bank head may just replace UK’s Gordon Brown as the worst market-timer ever.
Five years of temporary, emergency-only actions by the world’s central banks… (click for large more legible version)
As all of these actions took place and the balance sheets of the world’s central banks exploded – and each time, Gold has front-run that move…
This time it appears (once again) gold was right (in its guess to April 2013) and unless all the central bankers in the world are about to be forced to stop the seemingly unstoppable plans they have (black arrow indicates Fed and BoJ expectations alone), then Gold (just as in late 2012) is set to recover significantly.
Charts: IMF and Bloomberg