"oh, tell me the money supply and what is worth all that money?"
I'm a believer in Monetarism, you? This is why I disagree with some of the lack of actions of Greenspan. If he had slowed down M2 growth in early 1998, most of this lack of liquidity wouldn't happen. What we are seeing in the currency markets is a reaction to over stimulation of the monetary system, and this has the effect of filtering down to gold. Temporary rise in gold.
Predictions:
XAU MAXIMUM on OCT 16 at 87.5
Gold maximum on OCT 16 at 305.60 {spot}
This will be the high.
You said this:
"Gold will eventually show its true worth when catastrophic inflation is revealed."
Well, Greenspan {a monetarist} has successfully muted this for years. That's why we are seeing commodity deflation. In a very short time, the currencies will stabilize, due to M2 stabilization of last week, and Gold {the last safe haven} will deterioate. How can a commodity that the PDG CEO says cost $170 oz to produce, could be worth $300/oz? Fundamentally it aint worth it.
And this is why the huge rise in the YEN of today, is having very little effect on gold, as the US Dollar drops. When near Oct 16, when the US dollar starts to reappreciate, the POG will slide very fast. And that is when I'll be in the markets {short}. |
