China today cuts its interest rate bu 25 basis points to 4.35 percent. This is the sixth time they have cut their interest rates.
In response gold went up more than 1%.
We have Japan and EU which may not meet their inflation target and as such we could see further easing by EU, which Draghi hinted last night, and possibly Japan.
The latest move my China looks likely to push any decision of interest rates hike by the Federal Reserve into 2016.
As I have always said, with so much liquidity but little output to show, we could be pushing ourselves towards a hyperinflation in the the future. Let's hope it will not happen.
In this case, the best hedge will still be gold. My preference however will be gold mining counters. Gold doesn't earn any interests, but at least gold mining companies will pay dividends.
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