Bail us out, or else

Gold Investing News reports on the bail-out of distressed assets from banks due to the recent finanicial turmoil in the US.

Questions about the oversight of the bailout- whether the proposal should require restraints on executives’ compensation at participating companies- and even the level of assistance it would provide for troubled homeowners are all being raised in Congress. The move was initially treated with elation by equity markets; however, more pensive analysis by the markets have recognized that this will have a massive cost to tax payers and future problems are on the horizon. The additional cash injection by the Federal Reserve will likely serve as a catalyst for inflation, increasing downside pressure on real interest rates and driving investors out of U.S. dollar instruments. Amidst this uncertainty and confusion as a backdrop, the spot price of gold fell to US$884.00 per troy ounce.

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