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Li Yang, a researcher with the Chinese Academy of Social Sciences, said the country's economy may grow about 9.5 percent next year. China may undertake "quantitative tightening" if the U.S. government continues its quantitative easing program.China is talking about 9.5% growth and "quantitative tightening" while the U.S. economy continues it's decline with more talks about quantitative easing. What's the story? Maybe China is onto something here. Why doesn't our Federal Government get it? You can't create money and have out of control spending and expect things to get better.The Fed has taken a "fake it until you make it" approach; continue to prop up asset prices until the economy picks up. If it doesn't work, at what point are QE3, QE4 and QE5 no longer an option?The Fed's QE program is arguably the biggest science experiment of all-time, performed with taxpayer money, and the end result is unclear. Even Ben Bernanke admits that he does not know what the outcome will be given the complexity and ground-breaking nature of his Fed's bold actions. For all we or they know, all this money printing and monetization of debt could be setting the stage for a period of high and difficult-to-fight inflation.If all-out disaster can be averted in Europe, and the U.S. economy can continue to grow, gold can still see a slow technical grind to $1,600-$1,800. If Europe starts to falter even more (remember, debts come due over the next several years), which seems likely at this point, gold can really go parabolic to $2000+. We are heading toward an environment in which nobody feels comfortable holding any fiat currency.Who is buying Gold?China imported 209.7 metric tons in the first 10 months of 2010, which is 7.4 million ounces. Russia has increased their gold holdings, to 734 metric tons of gold this reflects an addition of over 96 tons of gold in the first eight months of 2010 alone, a 15.2% increase!India's gold imports this year are likely to reach 700 metric tons, about 46% more than in 2009Sri Lanka and Mauritius bought small quantities of gold – 12 tonnesInvestors should consider having gold and/or other precious metals as a portion of their portfolio as a risk protection against the possibility of further deterioration of the world economy and high future inflation.--

Sincerely,

Wes Peters
Swiss America
800-289-2646 X1054