Gold Tumbles On Pending Budget Deal

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Gold has made a sharp drop today as it still winds its way down. The concern that reaching a budget deal will also help the Federal Reserve to reduce its bond buying is on point. The budget agreement is another factor that goes to the heart of the gold propaganda machine that we would be facing hyperinflation so buy gold. The idea that the Fed stimulus is even remotely inflationary is absurd when there is over $2 trillion in excess reserves at the Fed because the banks are not lending. The banks have been dumping their crap on the Fed but they have been trading with the money parking in excess reserves while not lending anything out. Sorry – but you just have to look at ALL the facts, not just the so-called buying of $85 billion per month. Where is that money actually going? Is it doing anything but increase the cash banks trade with? Gold is headed lower. There is no dispute on that one.