Tuesday, April 8, 2008

Gold down in deflationary period ?

http://www.moneyweek.com/file/44984/how-will-the-federal-reserves-actions-affect-the-price-of-gold.html

When I look at the policies that central banks are adopting today, everywhere, I see an inflationary epidemic that is feeding on itself and confirming the bull market in gold.

Posted by holding out @ 11:47 AM (508 views)
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5 thoughts on “Gold down in deflationary period ?

  • Has anyone picked up the news about the IMF selling off 400 tons of gold (I didnt know they had that much). It makes me wonder whether some of the conspiracy theories are right about world governments seeking to control the price of gold

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  • interesting holding out, and supports a few people. the last paragraph is the key

    “I’m not going to tell you that gold is going to go up whether we have deflation or more inflation. I don’t believe that. I believe gold prices would fall in a monetary deflation. But I don’t expect one soon.”

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  • I’m torn between deflation vs inflation, but would side with deflation after an inflationary spike. That being the case holding gold with deflation setting in could be bad news – If you are reading S2R I’m assuming deflation without currency collapse.

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  • My opinion is that the signs look more towards inflation than deflation at the moment, with GDP growth (+2.8% pa) greater than energy consumption growth (-2.5% pa). With rising energy prices, expect energy consumption to continue falling, and RPI inflation to remain above 4% for the foreseeable future.

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  • sold 2 rent 1 says:

    I wonder why he keeps referring to M1 which is a very narrow definition on money

    The US stopped producing M3 stats in 2006.
    Why?
    They say because it was no longer relevant.
    IMHO it was because it is the most relevant money supply figure.

    US Debt as a % of GDP rose from 200pc to 270 between 1929 and 1933.
    It then collapsed sharply.

    Deflation may happen in the end but not before 2010.

    Just loaded up on this years gold unit trust ISA limits.
    Gold super spike coming up this June of 1500-1700

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