Gold, 10T in QE, and Inflation

kmiklas

kmiklas

Jerome Powell said:
I'm not worried about inflation. [09 Apr 2020]
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...well, I am!

With all this new money being poured into the markets, we have to start thinking about inflation. Gold is pushing 1700 now... are we headed for 2000 or above?

I don't need to remind those in this sub-forum that gold shot up to over 1900 subsequent to the Mortgage Crisis... and that crisis pales in comparison to today's Corona Crisis.
 
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kmiklas said:
...well, I am!

With all this money being poured into the markets, we have to start thinking about inflation. Gold is pushing 1700 now... are we headed for 2000 or above?

I don't need to remind those in this sub-forum that gold shot up to over 1900 subsequent to the Mortgage Crisis... and that crisis pales in comparison to today's Corona Crisis.
More...

then why there was such low inflation since 2009.

I have explained this before... technology advancement is moving all the money to the top of the pyramid.. hence the ever increasing wealth gap... so if the CPI measures mostly everyday items, it can't go up.

gold is just a dumb money comfort pick... it's premium over silver and platinum is already at unsustainable level.

the dumb money doesn't know where to go right now... bonds yielding nothing, stocks too scary... bitcoin too many scams, private equity all big disappointments.... so well, just buy gold then.
 
dozu888 said:
then why there was such low inflation since 2009.

I have explained this before... technology advancement is moving all the money to the top of the pyramid.. hence the ever increasing wealth gap... so if the CPI measures mostly everyday items, it can't go up.

gold is just a dumb money comfort pick... it's premium over silver and platinum is already at unsustainable level.

the dumb money doesn't know where to go right now... bonds yielding nothing, stocks too scary... bitcoin too many scams, private equity all big disappointments.... so well, just buy gold then.
More...
No.. I'm talking about buying gold in the traditional sense, as a hedge against inflation.

- Agree or disagree that with 10T in QE, inflation is a risk that must be considered?
- Agree or disagree with the traditional theory that gold is the best hedge against inflation?
 
kmiklas said:
No.. I'm talking about buying gold in the traditional sense, as a hedge against inflation.

- Agree or disagree that with 10T in QE, inflation is a risk that must be considered?
- Agree or disagree with the traditional theory that gold is the best hedge against inflation?
More...

already answered, there can't be inflation.. the 10T chart saying the same.
already answered, gold is dumb money's comfort pick.
 
The theory is, market makers and dealers and all sorts of funds are VaR sensitive. The implied volatility doesn't help for re-allocating currently. With central banks' balance sheets becoming more and more risky, the likely outcome is for large corporations to be restrained from corporate buybacks sooner or later. Meaning current rally is going to be hard to sustain. The best trade I can see is to buy gold every time dollar index goes higher. Central banks are going to buy crap loads to de-value their currency.
 
Gold is clearly in a bull market at the moment, and I think the bull could well last for 5-10 more years.

In the coming years risk premia and expected investment returns on all assets will be crushed to zero or below zero, as will interest rates - meanwhile central banks are pot-committed at this point, withdrawing stimulus is no longer a thing, and in fact it will only be expanded (helicopter money, NGDP targeting, de facto price floors on bond and equity indices etc). When the best you can expect from a passive portfolio is -2% a year real returns, the opportunity cost of allocating a bit to gold is far less than when expected returns are 5% or more. The potential for rising inflation is just icing on the cake.
 
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