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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 383.12+0.8%Nov 26 4:00 PM EST
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To: Maurice Winn who wrote (3576)1/18/2006 11:39:05 AM
From: elmatador  Read Replies (2) of 218059
 
We all love inflation. We just hate its effects. To understand gold you need to understand reserve of value and you need to understand inflation.

When there is steady inflation is good. Keep inflating nicely for a decade and pretty soon all you have is expensive and all others have is cheap. That's why you have G7 countries. They have had a controled inflation, plus a set of mechanisms which they could do way with it and the right set of circumstances. You don't think it was hard work only that made Japanese and German miracle, do you?

What lousy countries did was to say: "Voila! For us to get rich we just have to inflate, i.e., print money 'com gusto'"

Lets back to gold. If there is no inflation to increase the value of waht you own, you sell it and buy goods that can be inflated.

Shares of tech in the late 90s is a typical examples. After the crash of 2000, burnt investors put their money on what they see and touch: Houses and the housing marlet inflated.

Money then went to commodities. The China pull inflated metals, and other commodities.

What TJ says is: without tech, without housing, nor commodities, gold can be inflated a lot, as a reserve of value and as a mechanism of inflation. Because veryone loves inflation.
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