Commodity Trade Mantra

Posts Tagged ‘Inflation Hedge’

Run to Gold as the Inflation Beast Rattles Its Cage

Portfolio-destroying inflation is around the corner because of reckless government spending and unsustainable debt, so stock up the bomb shelter and buy gold. The latest data suggests that the inflation beast is stirring from its long slumber, which means that the classic inflation hedge of gold is on the verge of a sustained rally.

Gold and Silver - Lowest Risk, Highest Probability Investments in Today's World

If central banks are successful in reflating the global economy and inflation rises, gold and silver rise. If they are unsuccessful, global economy falters, but gold rises. The size of the moves that gold and silver can make will be dependent on which of the global outcomes will unfold in the next 6 to 12 months & beyond. Either way gold is the best beneficiary of each of them.

Bull Market in Commodities - Central Bankers to be Blessed with Inflation Soon

Commodities are now nearing bull-market territory after rebounding from the lowest level in at least 25 years. Investors have poured more than $17 billion into exchange-traded products linked to commodities since the start of the year. Sharply rising commodity prices since the beginning of the year are a warning sign that perhaps the inflationary times have begun.

Gold Buying by China in a Very Aggressive Motion Right Now

China has gone from being the price taker to the price maker. China wants its currency to be as prominent as the euro, yen & the dollar for global trade. As in the SDR, when you go and borrow the only thing they’ll take for collateral is gold, so the Chinese have been on a very aggressive program of buying gold every month, and we’re seeing that in motion.

Why Gold Is Winning The Money Competition

We’re now getting into negative interest rates on bank accounts / deposits. These are breaking out around the world & Yellen has talked about the possibility of having them in the US. If gold has zero yield & bank deposits have a negative yield, gold is the high yield asset, zero is greater than negative 40 basis points. So gold is the high yield asset; zero is more than negative.

It is all about Gold and Devaluing Fiat Currencies

Gold and silver were used because they held value, were universally recognized, accepted & convenient. Gold and silver were used as honest money until central bankers gained control over the money. If you prefer debt based fiat currencies that can be created by the trillions with a keystroke & devalued overnight, then by all means, trust in those dollars, euros & yen instead of gold.

The Relevance Of Gold - Sprott's 3 Litmus Tests

Some view gold as an inflation hedge, others as a deflation hedge. During times of financial stress, some view gold as an asset to own, while others might view gold as an asset to short, because of gold’s historically inverse relation with the safe-harbor U.S. dollar. Many view gold as the ultimate “risk off” asset, and just as many view gold as the ultimate “risk on” trade.

Readjusting the Time-Preference of Gold

Sooner or later a more realistic time-preference for gold is bound to return as leasing by central banks dries up. This explains why GOFO tried to go negative on several occasions in 2013. All that’s happening is time-preference is beginning to be rightfully re-instated.

Gold is last man standing as Rupee fuels Inflation

Wisdom of Indian housewives’ belief in Gold as a store of value is being seen after rapid depreciation in the Rupee recently – Now consider this a prelude to what will be seen in other economies soon as Currencies depreciate

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