Darleen > I think that if interest rates rise you will see that gold will still continue to rise.
Matter of opinion. Something has to drive the gold price and at the moment it's the devaluation of the USD. Inflation is very easy to "keep in check" by publishing some new numbers. As you well know, these numbers bear no relation to reality.
> It is impossible to control the inflation that we world are heading towards
Don't forget there's a great deal of deflation happening at the same time as manifest by oversupply of goods and unemployment. The game is to print has much money as possible and also to see that there's something like 5% unemployment -- then, by definition, there's no inflation. This also ensures that the rich get richer and the poor have to find employment in the military.
> It is impossible to control the inflation that we world are heading towards. Part of inflation will stem from Asia who living standards are increasing.
But don't forget because of the link between the yuan and the USD, as the dollar devalues, the Chinese get paid less (in other currencies). So the devaluation of the USD has a powerful deflationary effect on China. Also the devaluation of the USD, by causing revaluation of most other currencies, has a deflationary effect in those countries (theoretically).
> The higher wage areas of the world seeking to thwart inflation with interest rates will not realize this is commodity based inflation caused by an increase in world living standards and subsequent demand
In the US, however, as result of devaluation it will not be possible for "ordinary" Americans to maintain their purchasing power. Furthermore, they are already borrowed to the hilt. So they will be squeezed.
> Interest rates will increase to halt inflation.
Yes, but that has currency implications. In SA, for example, we have the highest interest rates in the world allegedly to combat inflation. So what happens? There is a flow of foreign funds into the country seeking higher interest returns than are available elsewhere. Result -- more inflation and higher interest rates. As result of the currency inflows, the rand is now possibly the strongest currency in the world -- and exports have all but ceased. Gold mines are all running at a loss, despite the high gold price, and workers are being retrenched. The main "export" of South Africa is now interest rates.
> US$ is plagued with additional cost of war.
That's what the US wants. It's a way of printing an unlimited amount of money with the least inflationary implications for the US, itself. Anyway, the costs of the war are not being borne by the US -- that's a myth -- they are being borne by the poor and middle-class Americans. In fact, the war in Iraq has the effect of social control in America. Poor people don't make trouble and don't rock the boat. They do what the government wants. That is why there may not be conscription -- poverty sees to that.
> World is plagued with terrorism
Thanks to America.
> world fear and the increased costs of protection
I think less than you think. The big challenge for most countries now is to maintain their economies without having to trade with the US. The regrettable truth is that this government has made the US into a pariah nation. And there will be costs.
> a question to every nation in the mid east wondering about if the US could invade their grounds
No doubt about that. And you can throw in China, Russia, France, North Korea etc etc.
> If you want to speak about this war in terms of human rights and include women's rights Iran would definitely be next or should of been first.
And what do think about women's rights in the US -- the right of a woman to decide if she needs an abortion? Christian fundamentalism in the US is becoming as bad as Islamic fundamentalism elsewhere so no-one has the right to point any fingers.
> all the pieces are in place for continued rise in gold.
As I said, it's not so much because of any intrinsic property of gold, but because the almighty dollar is going down the tubes. So hedge yourself, baby! Any way you can. |
