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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: sixty2nds who wrote (23778)	10/1/2013 12:59:57 PM
From: ahhaha	Respond to of 24758

Gold fell because gold abhors budget discipline. Shut down is an inadvertent budget discipline. That isn't why the cabal of over stuffed traders sold though. They sold gold in anticipation of the triumph of socialism in the sense that socialism embeds inflation. There's one small problem with that view. In the late '70s inflation was roaring and so were interest rates. Inflation and its attendant rising interest rates is anathema to gold, but when FED fights the rise of interest rates with monetary policy, gold rises in spite of the height of interest rates or inflation(same thing). What happened to gold back then? It soared. FED MUST fight the rise of interest rates for the same reason their creating Permanent now. They think they have to avoid a rise of unemployment, at all costs. Dual Mandate. So they try to keep interest rates down by adding money and this is like throwing gasoline on a fire. Either FED stops by withdrawing from the market or money creation goes vertical. During the period when their pretense to knowledge keeps them thinking they can manage the breaking rate gold soars. Gold soars for two reasons. When FED withdraws the economy collapses when the intrinsic effect of the level of interest rates is finally allowed to bite, and the collapse is equivalent to real deflation. While FED pumps gold must reflect the dollar conversion rate since gold is the absolute determinate of nominal value. During this period the King will be rid out by his 100,000.