This Very Week Ahead Could Be Quite Exciting orkrious
There were some really nasty gut responses I was getting as I watched the action last week in: The Russian Stock Market, Emerging Market interest Rates, The China Go Slow Smackdown, the Nasdaq, Coal stocks and oil stocks, Brazil, the ^TNX (Ten Year Treasury Yield)...which tell me a very rough ride could happen this week with the FOMC and the Jobs Report on Friday.
Back to gold: If there is a terrible deflation in which the money supply of the United States contracts, Im doubtful that it is "rational" for gold to perform in that environment, as the fundamentals for the dollar would actually be "improving." (Notice I didn't say "good.") Now Darffot points out that even if money supply contraction was occuring, that still does not cure the poison of all the future claims against the govt represented by Soc. Security and Medicare. So perhaps it would indeed be "rational" for gold to perform in a terrible deflation, contrary to my previous view--because a severe contraction in the money supply is not enough to improve the situation of the dollar.
This leads me to wonder that a more "rational" reponse, actually, from gold RIGHT NOW would be for gold to ascend immediately to 5, 6, 7, 8, 900 dollars per ounce. Because we are still, as I write these words, in the Big Bang Expanding Universe of Washington Dollars. The problem is with us right here, right now. Gold should be skyrocketing right here, right now!
These were my thoughts about Gold as a Drove down the highway yesterday.... |
