The Fed has recently paused on it’s rate raising. With rate hikes non-existent for the time being many people are asking what this means for the economy. No matter what the fed does there is one investment vehicle available that will experience a bull market over the next few years. In these uncertain times that vehicle is gold. Even if we experience a period of prosperity the price of gold will likely increase. At the moment it is hard to find a scenario that doesn’t benefit gold. Lets say that the fed increases the supply of dollars. This inflationary environment would help gold. Like all commodities gold always does well in inflation. The increase in gold would outpace other commodities because the price of gold would have future worries of inflation built into its price. This is the scenario that we are currently facing, and will likely deal with for the foreseeable future; mostly because the fed is going to be forced to inflate when the baby boomers retire, or if the real estate market collapses. For the sake of argument lets say that the US economy goes through a period of prosperity. What does that mean for gold? In all reality the price of gold would increase. Just because the economy is experiencing good times does not mean that the money supply is not inflating. Gold might not go up radically or immediately, but eventually it will have to catch up with the money supply. Buying gold during a period of prosperity would mean that you were getting it cheap, and all you would have to do is wait for the price correction. Turmoil in the Middle East isn’t going away anytime soon, neither is the world’s demand for gold. The US government does not seem to have an exit strategy for the wars in the Middle East. The whole area is unpredictable, whether it is civil war in Iraq, or a conflict in Iran, anything can happen there. The disasters in the Middle East create uncertainty; war or higher energy prices would likely benefit the global demand for gold. What if high-energy prices break the real estate market? The US could possibly see a recession hurting not only our economy but China’s exports as well. What would that mean for gold? The truth is that this would also help gold. The average investor would see the world’s two largest economies taking a hit simultaneously. If that were to happen it would send a message of uncertainty to the world, creating an even larger demand for gold. It is possible to see a combination of inflation and a suffering real estate market. Gold would sky rocket if this were to occur. Many people would have just lost a significant amount of money on their home. With the stock market flat there would be no better looking avenue for investment than something secure like gold. The fed would likely cave in to pressures to inflate the money supply to help ease the real estate bubble burst. Gold would have two things driving the price upwards, inflation and panic from a deflated real estate market. While it is hard to say how high the price of gold will go it does look promising that it will go up regardless of what the fed does with the interest rates. | 
