Gold

You have your usual reading-comprehension problems. My post on this thread didn't TELL anyone anything of the sort. I said the price of gold passed $1,000 dollars an ounce and it is based on inflation fears. I'm not telling anyone to do anything. Except you. Go away, please. Instead of pissing on the thread, why not go blow Tony Bernazard on another thread that is more your speed.

 

KVV, Love Surowiecki. Love him and his writing. This time, I think the warning bells are really merited. It's different. I'm one of the inflation hawks. Not always. But we went into uncharted territory. I started right around TARP. I didn't even wait for the massive spending bill before I started looking years ahead and trying to guess when they realize they can't just put the brakes on.

Suroweiki is right. There are still people actually sounding deflation alarms. I think it's insane.

One major thing is different right now, and that is the gold price support level. It gives a really strong indication of where real sentiment and fear is right now. It got through that arbitrary $1,000 an ounce barrier. If it stays there this time, it clearly indicates that 1) people think the worst of the recession is behind us, and 2) they are scared about inflation.

Also, one reason the price of gold has found a floor is that every time the price dips a little, by all accounts the Chinese have been dipping in to buy and build their reserves. That means they are losing, or have lost, faith in the U.S. dollar. Their behavior alone can turn perception into reality, even if this would otherwise have been the same tired warning bells that don't seem to come to fruition.

 

That tends to happen. When demand increases and supply stays the same, prices go up.