You are right. You are arguing with idiots who compare today's situation with 70's failing to comprehend it's completely different scenario nowadays. P.S. Good article about gold in ACTIVE TRADER magazine.
Commodities can rise and fall for simple supply/demand reasons, regardless of inflation. For example, during the Great Depression (the only time the US has had deflation since the creation of the Federal Reserve), commodity prices, including gold, went up from 1933. Commodity rises by themselves are not inflationary, and not necessarily a sign of inflation (although often that is the case). True inflation almost always manifests itself in rising wages across the whole economy, however. That is because the supply of labour is relatively fixed, and the demand is relatively stable in real terms. If and when genuine inflation occurs, you will be able to tell because wages will go up 6%, 8%, 10% per annum or more. This happened in the 1970s, and has not happened now. Therefore I think commodities are going up mostly due to dollar depreciation, and structural supply/demand factors, rather than inflation. If inflation were really here, the 10 year treasury would not be yielding 3.6%, it would be yielding at least twice that. Start fretting about runaway inflation only once you see the bond market crash.
I'm still not convinced, and time is on your side (intraday). It's now 2 pm est. But as the title of the thread asks, what if this measure fails? I think this is an absolute sucker's bet. And I am not talking to you intraday traders, who may or may not know what you're doing, nor am I debating inflation/deflation with makloda.
There was a bunch of negative news @ the close yesterday and the markets are up huge today nevertheless.
Agreed this is a sucker's bet. IMO, for what it's worth, I see a bottom being put in for the US markets. There is no doubt the market will go higher due to manipulation, but that's the Fed's mandate: keep inflation stable. Most of you will argue they are not doing that, but there are a lot of tools(read: paper) at their disposal to ensure that the economy does their bidding. Regards,