Commodity Trade Mantra

Posts Tagged ‘Deflation’

Gold Wins in 3 out of 4 Scenarios - None Bode Well for the Economy

If you think of gold, the only way gold loses is if normal business and private sector cycles come back. If that is the case, gold goes back 100 dollars per ounce. The other outcomes, deflation, stagflation, hyperinflation are good for gold. So gold wins in three out of four scenarios, but none of the three are particularly appealing. Here is why.

The Inflation Horse Defies Central Bankers' Whippings - Why?

Every 3 days for the past 9 years, one of the world’s central bankers dresses up as a jockey. They mount the horse & flog it with the whip marked ‘lower interest rates’. The inflation horse is supposed to respond to these whippings by suddenly springing to life & galloping towards the furlong marked ‘2–3% inflation’. No one seems to have told these jockeys they’re flogging a dead horse.

Will Gold Prices Crash With The Dow And Again Soar On Inflation?

Are we headed for a crash in the stock market? Yes, and a more severe one than in 2008. As the crash unfolds, gold will be sold even though holders may be confident about gold, as the goal will be to cover immediate losses. Inflation will then ramp up dramatically as governments increase money supply, eventually causing collapses in currencies. Currency collapse will again push up gold prices.

Deflation Scares Central Bankers - Can Gold Be Their Biggest Ally?

Every Central Banker dreads deflation. They’re doing everything they can to generate a 2% annual rate of inflation, but can’t get it. Well, the last thing you want to see is the gold price going down. If prices continue to drop, they fall to a point where they start to impact jobs. Drilling rigs & mines shut down. So in-fact, they want gold and silver prices, copper & oil prices to go higher.

Higher Gold Prices can Produce the Inflation the Elites Seek

There are three ways out of debt. One is default, which is not a good option. One is growth, but it’s not happening. The third way is inflation. The government has to have inflation. If it doesn’t, there’s going to be a crack-up in the national debt. But we’re not getting inflation from monetary policy. There’s another option & that’s to bid up the price of gold.

Inflation: A Semantic Change Worth Noting

The concepts of inflation & deflation have been completely misconceived by the public and economists alike. The semantic revolution has changed the traditional connotation of these terms. What people call inflation or deflation is no longer the increase or decrease in the supply of money, but its inexorable consequences, the tendency toward a rise or a fall in commodity prices & wage rates.

In Search for Money that's Good as Gold - What Better than Gold Itself?

Excess debt exerts strong deflationary pressures, and major central banks are now fighting those pressures with such measures as negative interest rates. If inflation wins, as the Fed wishes it to, the dollar may cheapen dramatically & the gold price will shoot up. Wayward monetary policies bring about a search for money that is good as gold. What better than gold itself?

Gold and the Postponed Stock Market Correction

Is it just me or is the next market correction taking way longer than it should? In other words, have the powers that be figured out how to keep the music playing better than ever? The Fed must have inflation & will do everything possible to create it. Central banks as well as markets have become aware that monetary policy has limitations. And the gold price is sniffing this out.

The Inevitability Of A Very Dramatic Inflation

Since deflation is the problem that’s staring us in the face now, governments are doing everything they can to reverse it & return to inflation, as they benefit from inflation. People can only be taxed so much before they rebel, but inflation acts as a hidden tax & most people don’t recognise it. Trouble is, hyperinflation, when it comes, comes very fast and is uncontrollable.

The Outlook for Gold Prices is Brightening Rapidly

US dollar’s serious breakdown, which results from the NIRP move in Japan & the realization that this makes further rate rises in US much less likely, coupled with growing pressure for global QE to beat back the mounting forces of deflation mean that massive and widespread inflation is not far. While this is obviously not good news for the average housewife, what could be better for gold?

Betting on Deflation May Be a Huge Mistake. Here's Why

If the metals markets look forward, as markets are supposed to do, they will anticipate the Fed’s response to a strengthening dollar and economic malaise. In 2008, investors knew little about the lengths to which the Fed would be willing to go. Today they DO know. The Fed will overwhelm deflation by creating new inflation.

The End of the Bubble Finance Era

During the expansion phase of central bank enabled bubble finance, optimism reigns and bulls and speculators insist that “this time is different.” Yet the laws of sound finance and market economics never change. It often just takes an extended time for all the excesses to work their way through the system and finally reach the blow-off stage.

Currency Wars Become Much Nastier During Recession Times

All central banks have printed trillions of dollars in their respective currencies under various QE programs. They are at the point where they simply cannot print trillions more without risking the collapse of confidence in their currencies. How will central banks stop the recession when they’ve used up their dry powder fighting the currency wars?

The Facts About Gold and Gold Speculations

Excessive debt is deflationary. Central banks can’t tolerate deflation so inflation is their game. They will print more & more. Global debt (official), not counting unfunded liabilities, exceeds $200 Trillion. It will increase but probably will not be paid. More debt means more currency in circulation, currencies are devalued, and gold becomes more expensive.

Gold Is Down. Remember - Fed will achieve Inflation ‘whatever it takes’

If the Fed maintains its tight money mantra in the middle of a deflationary currency war, then gold & other commodities could go a bit lower. My expectation is the Fed will wake up to the damage it’s doing and reverse course. The commodity and currency markets will soon hear the message that the Fed will achieve inflation ‘whatever it takes’. And then – gold will once again shine.

I Sure Am Glad (To Just Hear) There's No Inflation

Cost of things: Consumer price index is up 38%, college costs are only up by about 100%, State & local government taxes are up 75% & urban-area rents are up 56% – all since 2000. Despite all these widely known examples of rampant inflation, every month we’re told – Inflation is near-zero. The Fed is terribly worried that this deflation will wipe out humanity without a healthy dose of inflation.

Economic Inequality and the Gold Standard

Economic inequality declined in the US from 1917 to the early 1970s when Nixon took America off of the gold standard. The trend has been for greater economic inequality ever since. Part of the answer to the problem of economic inequality is to return to an honest and sound monetary system including — but not limited to — the gold standard.

The World Will Panic Into Gold And The Price Will Go Parabolic

When a monetary system finally fails, there will be a flight to the only money that’s left in the system and that will be gold. That will be the hour in which the next great surge in the gold price occurs. You can’t predict the exact moment, but you can certainly have a pretty confident view of the direction (parabolic).

Gold is (Once Again) Money

What China and Russia have in common is they are both protecting themselves against dollar & oil price manipulation by converting their export sales into gold. They are using gold to hedge dollar exposures in Treasury securities & oil respectively. While investors may have missed this development, other central banks have not.

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