Central bankers from around the globe, particularly in Asia are worried concerning the possible effects of relying too much on quantitative easing (QE) policies. This uses the government Reserve embarks by using an ambitious buying program of mortgages and treasuries. Quantitative easing poses risks for investors as the man-made increase of asset prices creates market distortions. Insurance firms asset prices skewing away from economic fundamentals, capital resources could be shifted from productive sectors, which would use a negative sustaining influence on gross domestic product.
It has forced public investors to take on more risk, especially public pensions who need to earn a return to fund liabilities. Real asset allocation is taking a larger a part of asset allocation for public pensions. Even Japanís GPIF is studying alternative investments, including institutional real-estate.
In the usa, there's been too little structural reform whether in taxes, entitlements, or fiscal spending based on the U.S. authorities. Deleveraging is a painful and unattractive course of action, not popular for politicians who would like to seek another term in office.
As QE usage grows and it is prolonged, it might create greater risks for countries attempting to leave this system. Central banks can offer liquidity to create some amount of financial stability. Central banks are limited inside their power to put fiscal government finances on a sustainable path.
Based on the World Gold Council, at the end of 2011, there was around 171,300 tonnes of above-ground gold. Industry price close for gold on December 20, 2012 was US$ 1,667 per ounce. The whole worth of gold above-ground could be about US$ 9.14 trillion.
Central banks are increasing their gold reserves. Brazilís central bank grew their gold holdings now it stands at 2.16 million troy ounces.