The inflation deflation cycle has been around since forever. You can go back to ancient Rome and see that Caesar had to deal with real estate bubbles bursting. Modern day central banking uses the deflation period as an opportunity to engage in debasement. Under the excuse of fighting deflation, massive ammounts of new currency find its way into the pockets of a select few. So yes, we had deflation since 2000 if you use a hard unit of account as an ounce of gold to measure prices, But you do not see lower prices because the massive deficits debased the dollar even more. Gold is more of a hedge against debasement. It goes up in periods of financial repression, when interest on cash does not preserve the purchsing power, and goes down when real returns (interest in excess of inflation/debasement) are positive.
you got that right, I'm only here because of what I'm getting in the money market. Either way, gold or cash, it's just a parking place, not a home.
Like I said, the gold bugs are masters of ignoring evidence. Here is a data point with a 300 year history. Admittedly this is the UK, but still relevant: http://digressionality.blogspot.com/2012/08/yield-on-british-perpetual-bond-is-at.html Basically, the consol has never been at a lower yield.
yes, and so are you, and that's why you will always be stuck in the middle until you change your ways I don't know who you think you are fooling take it somewhere else
what does "stuck in the middle" mean? this is my thread, oldtime. You take it somewhere else. I don't see you adding any value to the thread so far.
oh sorry man, I didn't realize this was "Your Thread" I thought it was a public forum. From now on I'll keep my thoughts to myself, and you can talk to yourself.
Gold, IMO reacts more to low/falling/negative real interest rates. When rates eventually rise of necessity, gold could be in for a big tumble. I'm not sure when that will be if ever in the next 10 years (look at Japan). However, to your point, there are times when inflation hits and the Fed reacts by tightening to slow it down. In that case short term treasuries or short term tips would be my choice. For standard inflation with low real rates such as we have currently, some of the following will hedge very well IMO: gold REIT's LTPZ (long term tips) XLE (energy) DBC (commodities) DBA (ag) MOO (agribusiness) PRPFX (inflation hedged mutual fund.... holds gold, silver, natural resource stocks, Swiss Franc)
I don't understand why you think bond yields have anything to do with inflation, especially since they are heavily manipulated by the "central planners" of countries that have a large incentive to keep rates low.
http://delong.typepad.com/sdj/2011/09/gibsons-paradox-and-the-gold-boom.html "Gold is and always has been a super Treasury bond: a very long duration asset that is or at least is perceived to be "safe" in the sense that its price does not trade at a discount (due to risk and default premia) from a Treasury bond of the same duration but instead trades at a premium. . . . Basically, gold pays no dividends or interest. It is thus expensive to hold in your portfolio when real interest rates are high, and cheap to hold it in your portfolio when real interest rates are low. When interest rates are high, you have to be pretty confident that gold is going to rise in price in order to hold it in your portfolio--which means that when interest rates are high you sell gold unless you think the price of gold is low."