RGLD, I do not believe either of your charts showed gold, just the dollar right? Anyways, as zdreg said, things do not always line up perfectly. Give it a little more time. There will be very bad inflation. Gold will go up. Maybe not as much in years past, as maybe now "cryptos" are the new inflation hedges, but gold will go up, make no mistake. I would say the reason it has not gone up a ton recently is probably because it went up over the past several years because at that time people were worried about inflation. So it had a big run based on inflation that, until now, hasn't really showed. But it will sit idle only so long, that much is guaranteed.
Oh I don't think anything about it is fake. But is it right calling it a "breakout"? There is nothing technical about it, its not something that is traded, its a measure of price increases in the economy, no?
To make your point you have to convert the results into $US. Furthermore is shorting allowed on the Zimbabwe exchange. In addition there are likely liquidity issues.
I didn't post gold because it's safe to assume everyone knows how to look it up and take my word for it. I just posted those 2 charts because I had it up. Either that or all the inflation already happened. I don't know i guess you're a more of a fundamentalist than technical. From the charts point of view, it doesn't make sense. Also the news is covering for Biden. I know inflation is bad and there are shortages everywhere. I'm just want to know who's buying right now if things are as bad as they say.
You know what? I think it could be a chance to get in, Gold is low right now, atleast you're far from buying at the top.
Couple of things to note here: Inflation is a global phenomenon and requires coordination from central banks to manage-- when Volcker was Fed chair most developed economies were also experiencing stagflation lol. Powell has already stated that he is going to start tapering treasury and MBS purchases, and the market is pricing in nearly 4 hikes in 2 years. Why should he raise rates right now? The market is pricing inflation at 2.44% on average over the next 10 years. In "your" words, the market sees this as a false breakout (e.g. "transitory").
I do agree Powell should be replaced with someone who better understands what they are doing. Elizabeth Warren should be listened to in this regard. We have inflation which looks worse than it is relative to the little inflation we have had the past 15 years. The fuel for inflation was provided by the extraordinary deficits of the Trump Presidency (7+ Trillion). This represents 7+ trillion of additional money into bank reserves which would normally have remained largely mopped up by subsequent Treasury bond sales in equivalent amount; yet as soon as the Pandemic threatened, the Powell Fed, under constant needling from the Trump administration, set about to reverse the mopping up of reserves by constant bond purchases. This had the effect of swelling reserves right back up, and pushing rates right back down to rock bottom level. This also added an extra goose to the economy, much, of course, to the pleasure of the previous administration which was headed into an election. Into this context of swollen reserves and low rates came then the Biden Pandemic relief funds, which not only amply compensated those out of work because of the pandemic but also provided some additional demand side stimulus. Given Pandemic related, diminished and choked supply lines, we should not be surprised that the demand side stimulus of the past 9 months furnished the catalyst needed to heat up inflation. We are not having, nor will we have, hyperinflation. Wray said something interesting about hyperinflation back in 1992 that I'll pass on here, but I have yet to fully digest what he wrote: "...the belief that hyperinflations are caused by the government 'printing too much money', running the printing presses 'at full speed' captures only the effect, not the cause of the problem. It is usually a breakdown of the tax system, rather than the speed of the printing presses alone, which creates the hyperinflation. While it may be superficially accurate to call this a case of 'too much money chasing too few goods', this does not identify the source of the inflation." My best guess at the moment as to what Wray was getting at is that taxes, like bond sales, drain reserves. But taxes, unlike bond sales, don't result in any additional bonds held in the private sector; bonds represent latent reserves and potential inflation. They are just money delayed. Taxing, for good or bad, is a power not given to the Central Bank, but remains with the "Peoples House." That's characteristic of democracies, an arrangement that even today most Americans seem happy with. But Lord help us if our Congress does not tax wisely, because the power to tax is the power to destroy net private sector wealth. The MMT economists say we don't need to tax to pay the government's expenses; we very much do need taxes, however, for other reasons. _______________ *Wray, L. Randall, "Understanding Modern Money," Pg 85 (1992) Edward Elgar, Cheltenham, UK.
But I don't see how inflation could have already happened if they are continuing to print money at a let's call it 25% rate. Past inflation is already reflected in the price, and MAYBE some expectation of future inflation is reflected in the price, but future inflation at a 25% annual clip year after year after year cannot be reflected in the price because it is the future printing of dollars trying to buy the same amount of goods that will cause the future inflation - those dollars are not hear yet to cause it. I think you are probably right in that gold is a good investment now. The problem is, it is only a "hedge" - i.e. you could be no better off even if gold is up 25% because the the dollar has depreciated 25% due to the inflation. I think the best thing to do is borrow money haha.