$600 Gold

[tahoma]

Gold has just raced up through $600 again.

Looks like the market is impressed by the Fed's inflation fighting gusto then.

[Jason]

Don't you mean unimpressed? As Gold goes up when inflation increases?

[tahoma]

Don't you mean unimpressed? As Gold goes up when inflation increases?

Did you miss the laughter smiley? I was being sarky.

[Jason]

Oh, sorry.

[Realistbear]

Yup--markets are very unimpressed. I think it was poor old Ben's use of the words "over time" that spooked the markets. A bit wishy washy which means he will have to define what he mean't in the minutes. The Fed decision was precede by a 5.6% rise in GDP growth which in turn was preceded by a rise in new home sales. Plenty there to build confidence that a few more hikes will not affect the economy too much.

One thing is for certain a falling dollar will stoke inflation in the US like nothing else can which is somewhat of a rock and hard place situation again.

[Guest Bart of Darkness]

Naaah, gold is in "freefall".

Must be true, TTRTR said so.

[OnlyMe]

Next leg up in commodities in place (higher low). All the hard talk on inflation amounted to naff all. 1/4 point in the US and in the UK comments about targets being met.

Wonder what will have to be done to grab attention next time - probably a lot more.

http://quotes.ino.com/chart/history.gif?s=...p;a=50&v=d6

[Guest Alright Jack]

Gold is going up regardless of what the fed do in my opinion.

Raising rates the way they have done already means the US economy is fcuked. This means crises and ultimately many, many defaults. Who really pays in a crisis? The creditors. It is not always obvious to realise that the real creditors are normal folk like you and me:-

i.e, holders of any financial instrument such as pensions, bonds, cash, bank depostis etc. I is savers and those who have a natural tendancy to trust institutions that suffer at the hands of the mass folly. (That's not to say the cronic debtors don't ultimately get what they 'deserve')

The only way to try to mitigate the effects of a severe economic crisis is to somehow avoid being either, a debtor or a creditor. This is FAR more difficult in reality. Most try to move into 'real values' of which real estate serves excellently and also gold and silver fit the bill along with other primary commodities. Au and Ag are specially handy due to the fact that they are compact and don't deteriate (such as soft commodities)

The real winners are those who borrow VAST amounts and invest (in real estate for instance) before the currency goes through the revaluation.

In some ways I think that gold is more likely to go down if the FED lowers rates because this may create another bubble somewhere else with potentially higher returns in the short term.