The reason for gold to hold up in deflation is because it's transiently deflation. The idea is that once the deflationary bust is over, Big Ben's declared intention to avoid deflation will lead to hyperinflation, abandonment of US$ and reset of them by moving the decimal point a couple of places and a Zimbabwe effect.
People will find gold, oil and anything other than US$ to be a better place. Gold, being money-like, will, in the gold bugs' book, become disproportionately valuable as people can't cart lumps of oil or coal around to buy groceries.
While things are currently deflationary, guessing how long that will last is difficult. Gold bugs are getting in ahead of the crowd, they think.
Nobody will ring a bell to announce that it's time to shift to the hyperinflationary time. Nor will they ring a bell when the bottom of the Dow decline is in.
So I can see that gold is at $1000 an ounce and that there is plenty more upside, even while there's deflation on the rampage.
Super capacitors seem like a nice idea, but chemistry is easily carried around in a car, either to burn directly in Otto cycle or in battery form.
Mqurice |
