Who is talking inflation?

[sumdumguy]

How do you explain the free-fall in gold, Cotton?
Remember our little discussion re inflation versus
recession and deflation? Enter Scene 2.

[cottonpicken]

Most wonder why it took so long for the correction to
occur.

Non of the factors to own gold have changed.

Everything sold in the past 2 days,was also bought.

The only thing to worry about is,where's bottom,when
should i buy.

[liberty]

Good article here by Paul Craig Roberts on the reason for gold's decline:

http://www.paulcraigroberts.org/2013/04/04/the-assault-on-gold-paul-craig-roberts/

I saw one Bloomberg item which claimed that the price of gold was falling because of the strengthening U.S. economy which will in turn decrease the need for Fed quantitative easing. If so, why is the rest of the market so badly in the red as well? Oil had a big drop in price as did most commodities. Everyone who is celebrating the "demise" of gold should be careful what they wish for.

It's quite possible that I will get a chance to load up some more precious metals at a price not far off $1000 an ounce, something I never thought I would see in my lifetime.

[sumdumguy]

I am not very Bullish on precious metals, mainly
because the government has a vested reason to
manipulate it. I was there in 1980 and witnessed
the freefall. People using margin to speculate,
precipitate the mayhem. Did value of precious
metals recover quickly from 1980? no, it took
untol 2004-2005 to wake up the bulls. I am sorry,
I dont foresee $2500 gold because I saw the
hoopla in 1980 and paid the price. There was no
stopping the slide, and I wish not for that to
happen again because a lot of people around me
are heavily invested and I have some, but I am
on the same page as Warren Buffet. Do you
wonder why the government hasn't stopped the
short side? I hope it levels out soon or the
carnage will hurt a lot of people.

[cottonpicken]

Why would anyone hold metals in 1980,when bonds
where over 15%?

[rhoff]

SDG you should take a look at a gold chart from
1970-1980 and notice that in 1975 gold fell 50%
and yet the run continued on the following year.
Imagine if gold did a 50% retracement from its
2011 highs,that would be a fall down to the 950
range. Which is roughly the marginal cost of
production for most of these minors. The moral of
the story is that gold can fall hard and still be in a
long term uptrend along with inflation.
I don't invest in Gold because I would sooner own
business's that generate earnings.
This would be a good time for Errol to explain to
us all how unprecedented global monitary
stimulus will lead to deflation. We know what you
think will happen but can you be specific on how it
will happen. ( basically Kodiaks question from an
earlier thread).

[parsley]

http://silverdoctors.com/something-big-is-
collapsing-out-of-the-publics-sight/

[sumdumguy]

Pars, I am unable to open that site, can you pls
paraphrase it?

[errolanderson]

rhoff . . . just ask Japan.

Japan has been battling deflation for years. Their policies of stimulus has done little to trigger inflation. The U.S. (IMO) is now entering a similar phase of their debt cycle.

Keynesian economics (again in my opinion) works in mild recessions. This is not a mild recession and QE3's impact to create an inflationary environment is clearly not working.

The Fed must now be quite uneasy. Printing money has become less and less effective and their balance sheet bulges to absurd levels.

Just ask post-war Germany that question. Excessive money printing took years to repair.

My fear is that the fed has now created is a very dangerous and unstainable bubble. And today's meltdown is no accident. This artificial bubble is showing cracks that will and has already started to impact Western Cdn agriculture. These fed policies (designed to buy time) has created a larger economic problem (IMO) that is basically unfixable without a changing of the guard in global wealth. Cash is king.

To me, we are now at the entrance of that change, which will create financial pain and then gain throughout all sectors of the economy. In other words, the economy is going to get a lot worse (over the next 2 to 3 years) before green buds will eventually appear.

This sucks because all of us will be affected. But that's the damage of kicking-the-can-down-the-road policies with excessive government overspending and lack of government accountability and blind optimism that we can simply inflate ourselves out of these mess.

For growers and feeders, risk management business and marketing skills are now needed more than ever. Not complacency . . . .

Errol

[boarderbloke]

[URL="http://www.peakprosperity.com/print/81535"]What Happened to Gold[/URL]