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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG
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To: kayco who wrote (16295)3/21/2010 4:27:21 PM
From: gold$10k1 Recommendation  Read Replies (2) of 48092
 
From all that I have read on this subject, my conclusion (and that of others more learned than I) is that the nominal interest rate is not relevant, but that the real, inflation-adjusted interest rate (nominal rate minus inflation rate) is. 5% nominal interest rate with 10% inflation still makes bonds a losing proposition and gold a winner. When they are serious about ending inflation (and bringing the gold bull market to an end) they will either bring REAL interest rates to 5-6% and reduce the money supply (as Volcker did in 1980) or introduce a new currency based on something which has a fixed supply (precious metals, land, etc.)
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