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Leading Economist Dr. Scott Sumner Shares Insight on Apocalyptic Theories of Dollar Collapse and What's Driving the Gold Market

Dr. Scott Sumner, the economist credited with popularizing the 'nominal GDP targeting' policy which was adopted by the Federal Reserve and Bernanke, has written an article about the U.S. economy and its impact on the gold market.


Irvine, CA -- (ReleaseWire) -- 05/28/2015 --RCW Financial, a firm that assists individuals with a wide range of tangible investments, has released their latest article, "Gold … A Solution to a Non-Existent Problem", written by economist and Advisory Member, Dr. Scott Sumner. In the article, Dr. Sumner shares his insight on the national debt and its impact on the gold market.

In the article Dr. Sumner provides a realistic overview about the national debt and a more holistic explanation of the U.S. economy despite predictions on the Internet about the U.S. economy spiraling into a decline and the dollar meeting its demise.

"If you look at the part of the debt actually held by the public, it's a bit over 70 percent GDP, which is not unusual for a developed country. The budget deficit which is the increase in the debt over one year, has fallen to about 3 percent of GDP, also similar to many other countries. Even better for the Treasury, interest rates are relatively low and likely to rise only modestly. This means the cost of financing the national debt is not too burdensome and long term rates will stay fairly low, about 2 percent to 4 percent, even as short term rates rise."

Dr. Sumner also addresses the false hype over the risk of high inflation due to quantitative easing and near-zero interest rates and dispels concerns over any risk that QE would lead to high inflation, because unlike previous hyperinflationary episodes, most of the new money went directly into interest-bearing bank reserve accounts at the Fed instead of releasing trillions of dollars of paper money directly into circulation.

A sample of the article is reproduced below:

If none of these apocalyptic theories of dollar collapse are true, then what does drive the international gold market? Gold tends to do well during periods of extreme economic stress, such as high inflation or depression, and also during periods of very low real interest rates. […]Even though nominal interest rates fell in the 1980's, inflation fell even faster, so real interest rates actually increased. That's why gold prices fell after 1980. With the Fed now targeting inflation at 2 percent, it's unlikely that we'll see a repeat of the highly inflationary late 1970s."

To download a copy of the full article, visit http://www.rcwfinancial.com/content/docs/Sumner-Gold-Report-May2015.pdf

About RCW Financial
Located in Irvine, California, RCW Financial offers financial solutions to individuals looking to diversify their portfolios with alternative investment strategies for wealth preservation. RCW Financial specializes in high-end investment grade, rare Unites Sates coins with the most significant rarities in existence. President Steve Contursi, a professional numismatist has over 40 years of experience and has bought and sold over $1 billion in rare coins.

For more information, visit http://rcwfinancial.com/