The US is going to pay for all the bank/insurance bailouts by printing money. This means that high inflation is the Federal Reserve's policy.
Further on this issue of bailouts, Paulson Doctrine?
Unwittingly or not, Treasury Secretary Paulson has effectively created the Paulson Doctrine. The doctrine states that firms that he deems too big to fail (but we're not exactly sure where the line is drawn: LEH? No. BSC? Kind of. MER? Maybe. AIG, FNM and FRE? Definitely.) get the U.S. Government (and the U.S. taxpayer) as new senior shareholders, while the others are either left to execute an orderly private markets Good Bank/Bad Bank restructuring (if they can, like Mellon in the late 1980s) or a hurried Chapter 11 Good Bank/Bad Bank restructuring (if they can't: see BCS/LEH circa 2008).Interesting article. Gold has been increasing in price for quite a while. Ultimately it is because of a lack of faith in the US dollar that money has been going into gold. With the US printing money for AIG and the on-going inflationary policies there was a very sudden spike from bonds into gold. Investors believe their money is safer in gold than bonds.
