You're right on all points... so, how come gold is going lower???
Can't we say that, historically, gold has shined when there was an excessive expansion of credit that created inflationary pressures?
I think we've already seen that.. Given all the debt that exists in the world..
It still seems to me that, especially what we saw in 2008, we're heading for another credit crisis..
And half of the US physical dollar currency is located outside of the US (so they say)..
If debt is defaulted on, it's a contraction of money supply, not expansion, which is deflation.. Commodity and asset prices should fall as folks have less access to credit to prop up the prices..
Not only this, but we're seeing increasing chatter about "bail ins" when means that CASH (electronic, of course) will be confiscated to bail out banks that are TBTF, but beyond the reach of governments to save..
At the same time, we're hearing pundits publicly declaring that cash should be abolished, so that people have to use banking institutions in order to conduct all economic transactions.. for a FEE, of course..
Yet, they are making it a crime to withdraw large amounts of physical cash from your bank accounts, despite the fact that all it represents is the termination of a "demand loan" that you made to that bank when you entrusted money to them in exchange for interest, which now doesn't even surpass the fees they charge many people.
I'm thinking Cash is going to be the hot commodity, followed by gold.. Which is why I still tend to think that we're going to see the USD climb over the coming year(s). But I will be watching Gold to see if it rises in sympathy.. That may actually signal a bottom in PMs once the USD tops out.
Am I missing anything?
Hawk |
