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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 414.48+0.7%Jan 9 4:00 PM EST
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To: TobagoJack who wrote (163497)10/9/2020 10:23:24 AM
From: THE ANT  Read Replies (1) of 219225
 
Good video TJ. I have been in this inflation and deflation debate since at least 2003 so will share some thoughts

Gold has only going to where gold should go. My model on asset values on a broad generalized non-specific basis is as follows:

Asset values over periods of time are related to
1--Income stream produced
2- Interest rates. For every one percent decrease in rates assess rise by 30% and for every 1% increase in interest rates assets go down by 30%
3--speculative excess or speculative negativity. At any point in time in a class of assets has a premium or a discount based upon human psychologic speculative thinking. If specular thinking is neutral there is neither a premium or a deficit.
4--inflation over the time period

So let's look at gold over the last maybe 30 years. From its bottom it should've at least doubled by going from speculative negativity to neutral. Now let's assume interest rates have fallen by 6% over that time on a cumulative basis this would be 282% up. Now let's assume inflation of 100% in that period of time. My model says gold should be up about 400% after doubling its value off the speculative low(you would then take that value and adjust for this moments speculative premium or discount to know the true value)

Now in regards to inflation and money printing and the like some thoughts

Assets are only overvalued if interest rates go above zero and they have to correct. Why must interest rates ever go above zero? The Fed should leave interest-rate policy at zero or a very low positive number and control deflation via fiscal policy including MMT if necessary. This MMT and fiscal policy should never be used to create inflation as there is no net gain from inflation other than its stealth tax value. Any inflation that results in an interest rate increase will crash asset values and make it harder to purchase housing and have a net negative affect on the economy

I see no need for money printing at this time but it's time will come. Since rates have gone from 1.75% to zero gold stocks and bonds have reflected this change but not housing or the international markets The coming housing boom and developing world boom will be massive (Got NAIL,INDL, BRZU?). This will increase the borrowed money supply. It will be when this boom is over that we will need to supply MMT money to the monopoly game to account for all the new players in the game (China, India,Africa etc...)
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