Inflation

I look at gold vs. general (positively correlated) industrial metals quite a bit, but in listening to the Bob Hoye interview here, I got the prompt to check out copper-gold (CGR)….

A few weeks ago we wrote about the true cause of hyperinflation, which is a major break or failure in the bond market. It has nothing to do with demand, bank lending or the velocity of money as many have suggested. It is a confidence issue….

When the tech bubble burst in 2000, Greenspan tried to “fix” the problem by cutting rates and printing money. Fix the problem he did … well sort of!

I grew up in Germany, a country that went through hyperinflation twice during the 20th Century. Maybe that’s the reason I learned inflation is bad and inflationary policies are diabolic….

But for the purposes of this discussion, we are talking about inflation in the real economy, not the paper economy. The link can be very tenuous at times, but the real economy…..

Indeed, the Fed will have to keep a close eye on inflation, but it also will have to watch for turbulence in the housing sector. The FOMC statement said that the Fed is still in the process….

Inflation-Adjusted Wages Fell 1.6% in 2009

The Five Reasons Gold Will Hit $5,000 By Peter Krauth, Contributing Editor, Money Morning Let me get right to the point. Gold’s going to $5,000 an ounce. I know that sounds preposterous to most people. In fact, some of you probably think I’m crazy. But for a whole host of reasons, $5,000 may well end … Continue reading

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the U.S. Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36% of the government’s marketable debt – about $1.6 trillion will mature in the next 12 months.

Ted Scott, director, UK Strategy, F&C, says, “The only way that gold can underperform is if the U.S. and other developed economies recover in a conventional way by cutting spending and raising taxes while at the same time embarking on a period of stable economic growth.”