(1998-2007) inflation = money supply and credit expansion at substantially faster pace than intrinsic and real economic growth
when all items rise in price, i.e. iron, homes, ... energy
(2008-?) deflation = money supply and credit contraction, and previous valued stuff gets crushed, as in everything, when folks must pay down loans, and money rises in worth
(1982-1998) disinflation = in between state, where inflation and expectation of inflation tames, and nominl interest rate gets crushed from 18% back down to 5% over time
question 1: is gold money or not? if not, why has the lease rate been rising, and why can people convert it to paper money with little effort and without causing a crash relative to all the other stuff, be they real estate or metals or shares
if gold is not money, then it will rise only if the authorities succeed with their helicopters, infrastructure spending, etc to combat deflation
if gold is money, it will rise / fall depending on whether people want money to pay down loans or wish for money that they ca carry while travelling through time, navigating the darker interregnum
my contention is that gold is money, and gold is the best kind of money for surplus capital, excess savings, and spare worth
the bad money will first drive out the good money, making it scarce, and then the bad money will blow up
right now, folks who are rushing into usd have little choice, and people who are hoarding gold because they must afford to
one of the two groups is making a mistake, long and/or short term, depending on interpretation
i remain a buyer of gold all the way to 500 if necessary, and should platinumbecome available, i will add that as well
because i believe in the power of officialdom to inflate, and to bring on successive deflationary opportunities
we will be done with deflation one way or another, hard or soft
i am sure we are not disinflating (1982 -1998)
the fed / treasury of the usa is borrowing on everyone's behalf even as everyone is trying to pay down loans, and so THEY are certainly trying to inflate
should they fail, empire done for, and gold become interesting hedge against a Carthage outcome
should they succeed, then by travelling the Japan way, to Zimbabwe, we will eventually end up in Argentina
recommendation: buygold, and if you already have it, donotsellgold
btw, gold has done fine so far, what is the fuss finance.yahoo.com^gspc;range=1y;compare=gld;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined ? how many folks would trade their ytd performance for that of gold? 6.9 billion folks ? |
