Replies to post #13896 on iShares Silver Trust (SLV)

[jt6455]

Even 50% backed would force a valuation on gold making it too expensive to buy for most folks and make me crap my pants with excitement.

Not sure how all this plays out but I know gold and silver will be part of the solution.

[Toofuzzy]

>>>>Sure they could stimulate the economy by buying Gold but they choose to buy treasuries that are unending - they can always originate more T bills whereas Gold isn't so easily manipulated.<<<

Ya know I wasn't thinking about the Fed buying bonds when i wrote that. I was just thinking about what the effect of the government buying gold would be.

I don't understand why the government doesn't just print money and spend it instead of going to the trouble of selling bonds to banks and then having another branch of government (the Fed Reserve ) buying the bonds from the banks. That second branch now earns interest on the bonds from the first but then gives all the interest it earns back to the Treasury (do I have this right)

The Fed Reserve could still buy and sell bonds to regulate the economy but I guess if there wasn't a debt( yeah right! ) then only fiscal policy would be available (I suppose they could buy municipal debt or mortgages) in which case the government would spend more or tax less to stimulate and spend less and tax more to slow the economy. A much slower process for sure as we would be waiting for congress to actually make a decision.

So is this increase in the price of silver for real or just a head fake.

Toofuzzy