BGR,
You're waving your swords at imaginary windmills. Nobody will debate that gold, as a reflection of inflation, will be dull in a deflationary period, unless it is one that is precipitated by financial upheaval wherein all paper burns. Since you will dismiss this possibility out of hand, I'm going to gently nudge you to look at the more likely scenario, which you call "soft landing".
The jump everyone just took was that the signs of a slowing economy (which we have noticed now for at least 3 months) means that inflation will abate. Therefore, no more fed hikes, and the dung leaps out of its death bed.
The bear case does not take the absurd leap from a slowing economy to rising equity markets. (Except that in understanding the clown psyche, it was all to clear that we would rally hard on any signs of slowing growth - Fridays meltup was an absolute certainty.)
From your post I take it that you already believe that inflation has been conquered, but even a cursory look at the JOC-ERCI, the ECRI FIG, or any index you want (except the price of gold - we'll get to that later), and you can not escape the reality that inflation persists, despite slowing growth.
The ERCI FIG from 6/00 still shows inflationary pressure at decade high levels (although it moderated from May because of the dip in oil prices), and I'll sum up what the NAPM said about the prices manufacturers paid for basic goods -
UP in Price: Everything under the sun except one item and one item only.
Down in Price: Caustic Soda (2 months).
So until we see these numbers reverse dramatically, your arguments about a falling price of gold based on deflation are straw men.
The "soft landing" you think we're heading into is one where our economy remains active enough to support the growth of Asia economies, no? Do you think the growth of Asian economies is deflationary or inflationary for commodities?
The irony of it all is that tech is, more than any other sector, shielded from the pressures of commodities, so this would be a good place to park money in a period of commodity driven inflation and a slowing of the us manufacturing economy. But the idiocy of this argument is clear - do you see it? |
