Inflation caused by quantitative easing is not so significant. In addition to China's extreme quantitative easing, which led to a sharp rise in asset prices, quantitative easing in other parts of the world is actually much milder than that in China. For example, compared with the former Japanese government, it is of course extremely radical, but compared with China, it is completely insignificant.
QE in the United States is also very moderate, mainly buying assets and bonds, and its liquidity is easy to control. However, China absorbed most of M2 with real estate and extremely inefficient investment. Therefore, inflation is not obvious in the field of daily consumption, and pork prices have recently declined. The PPI is negative for 13 months, the real economy is seriously deflationary, and the assets and virtual economy are extremely inflated.
2. The second reason for the plunge: the crisis of confidence triggered by the EU.
The Cyprus incident has also aroused people's concern about the long-term trust in the banking system, and people even began to suspect that such a large and orthodox organization as the European Union will have no stability in the future.
The precious metals analyst at Credit Suisse said: "Obviously, there are more doubts in the gold market than a week ago-the scope of doubts includes the independence of the central bank, the central bank's control over gold reserves and the sanctity of the EU treaty. Gold investors once again realized that investing in gold is not a very effective hedging measure. "
3. Reason 3: Gold is overvalued.
The valuation of gold is too high, just like the house price in China. Even rich people think it is too high, especially compared with overseas housing prices with permanent property rights, the value is ridiculously high. In recent years, many gold and silver spot and futures trading platforms have sprung up, and each trading platform has attracted countless funds to follow up, just like fund-raising games. Later funds became profits from first-come funds. This illusion of wealth has promoted more capital to enter, and the gold market is unprecedentedly prosperous. The game scrolls too much, and the subsequent funds can't keep up. First of all, those big funds will react and take the lead in evacuating at a high level, leaving retail investors struggling inside. Big money (government or central bank) will peel three layers of skin for a sheep, and it will also deceive and induce retail investors to cut meat repeatedly, chasing high and then cutting meat until retail investors leave completely at a loss.