History shows that policy makers “have a tendency to be late, tightening financial conditions slowly for fear of doing it prematurely or too severely,” the BIS, which oversees central banks, said in its annual report published today in Basel, Switzerland. “Because their current expansionary actions were prompted by a nearly catastrophic crisis, central bankers’ fears of reversing too quickly are likely to be particularly intense, increasing the risk that they will tighten too late.”
We can expect to see more reports like this into early 2010 as central banks become alarmed at the extent to which they've let the inflation genie out of the bottle. They'll become even more alarmed when they realize that the gold they've surreptitiously sold off will be very expensive to buy back . . . unless governments confiscate it for them, of course.
Nota bene: Anthony J. Alfidi is long IAU and GDX (with covered puts) and is also long ANV in the expectation that gold will hold up well during inflationary times.