Where are all the gold gurus?

[sumdumguy]

In the back of my mind keeps ringing, "every dog
has his day."

I think that America has exported its jobs that
generate GDP, brought in a pile of immigrants
who are now on the dole.

Capital is flowing out to China for everything. No
jobs, no money, no inflation, simple pimple!

The only way to fire the engines is industry &
Jobs as cost-inflation only goes so far when the
masses have no money. Where is Roosevelt,
oops gone.

[sumdumguy]

That is cost-push inflation. America needs
demand for its own goods.

[cottonpicken]

Lol,Errol,how in the world do you believe the soverign
debt of the western world will ever be paid off?

[rhoff]

The QE is a lot like trying to break a damn. They
won't stop till it gives way and when that happens
"smart" people will not be in control of market
sentiment.the bond vigilantes will,and the fed
won't be able to unwind in a nice gradual decline
like they speak of. All there theories seem
dreamed up in a vacuum where market sentiment
and human nature don't exist.
Also the fed has a problem where the long
bonds they hold will not be able to fund the
ongoing demands of servicing banks reserves.
Which means they will have to either sell there
massive holdings of debt or print money. Given
what we know about how govt likes to spend I
highly doubt they will have the treasury step in to
fill the gap and I highly doubt they will try to sell
debt at a huge capital loss - so they will print more
money in order to cover the shortfall which could
last for years and years. Remember this bond
market has been in a bull market for 30 years and
is now a bubble. It could take 20 years and a
spike in interest rates to turn that around.

[liberty]

Every time gold has a pullback in its bull run, the naysayers have proclaimed its demise. It's had several pullbacks in the past several years, and each time went on to set new highs.

Inflation is amply evident in the price of farmland, now that we have institutional investors piling in as they search for better returns.

Central banks have also created a bubble in government debt worldwide, as governments borrow money to service obligations that they cannot possibly make good on.

Gold is just taking a breather.

Central banks are only good at two things: creating inflation and creating asset bubbles. They literally have no idea or interest in creating deflation.

[TOM4CWB]

"Lol,Errol,how in the world do you believe the soverign
debt of the western world will ever be paid off?"

Cotton; Did Germany pay off their debts from the 2
WW's? NO.

Will the US be required to pay off the debt from 2 Iraq
and Afgani wars... the war on terror... I think you know
the answer. NO.

China has used QE for decades... and no one
complains... WHY?

India has put in punitive import restrictions on Gold...
which has reduced the demand and guess what... THE
PRICE Dropped! Surprise Surprise!

Cheers

[ado089]

Inflation only works when there is an underlying opportunity for expansion of the economy. Unfortunately there are now more old people than young people in most corners of the world and even though old people have more money they spend less of it. No spending = no growth = no inflation. Cash will be king for the next 10 years.

[errolanderson]

ado089 . . . totally agree with your
statement.

Government spending does not create
prolonged economic growth. This is Peter
to pay Paul economics. It has to come
from real business or the private
sector.

Central governments are desperately
trying to trigger inflation with mixed
results. But how can there be an
inflationary spiral when the average
Joe's disposal income continues to
gradually decline?

Have the wild gold bulls out there and
inflationists thought about this? A jump
in inflation and interest rates would be
a flat out disaster for the middle
class. It would trigger a massive
washout in the Cdn real estate market
for starters.

Now lets stir in China . . . . China is
at the end zone of their real estate
bubble. They are communists that are
about to get one hell of a lesson in
overheated capitalism. When the bottom
falls out in China housing/condo market,
there will be no inflationary pressures
in Canada for a very long time (10 years
plus?) as China is the key driver for
the Cdn economy.

Have the gold bulls looked beyond their
own self-serving interests?

[rhoff]

"Government spending does not create  
prolonged economic growth. This is Peter  
to pay Paul economics."

I agree Errol with that statement. Govt does not
generate wealth only productive people do. Govt
just takes that wealth and redistributes it,however
govt deficit spending does not come without
consequence. It comes in inflation because it
pushes more paper into chasing the same amount
of goods and services. You are dismissive of
inflation because the velocity is not there but that
can change the second people realize the bond
market is going to roll over them. I feel like we
should start posting clips of Milton Friedman
explaining this.

[rhoff]

You might think I'm contradicting myself but I don't
have as strong feeling in which way Gold will
trade in the short-medium term. Im not smart
enough or dumb enough to know how human
emotion will play out that precisely. I do however
know that govt is not going to cut spending until
the bond market forces it to and that's why I think
long term inflation will be a real threat.