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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (89092)	10/24/2008 3:08:55 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 116555

Elroy, I agree, but the break-even cost is way below what the price is now - hence the Gold:XAU ratio as a rule of thumb. They are a deflation hedge because in a gold-standard, the price of gold is fixed and input costs such as oil and labor fall. In an stagflation, the price of gold skyrockets faster than input costs. In a hyper-inflation, you have bigger problems than the above two points. It's all relative. The point is in periods of extreme, both gold and miners should do well but you have to survive what can go on in between...