Thursday, January 10, 2008
When to sell gold
"If we stay with decent world growth and inflation, gold and oil continue rising. If we get stagflation, that could be worse, and gold and oil rise more, .... But, even if central banks cut interest rates, we may get a big economic contraction anyway because, so far, Central Bank rate cuts have had virtually zero effect on the spreading credit contraction. If that is the case, we get a severe world economic recession. In such case, gold, commodities and oil likely turn in the other direction. The present price levels will not stay with us. It is going to be important for gold and commodity bulls to discern if a serious recession is about to emerge which stems both inflation and or stagflation causing a big world stock sell off."