EDITOR'S NOTE: The author below writes “It’s a no-brainer to imagine gold should rocket with inflation…Well it seems that information is obsolete because gold is stuck.” The problem with this is that this “no-brainer” is predicated on a faulty premise. The information is “obsolete” not because “gold is stuck” but because it’s never been a reliable basis from the get-go. There are plenty of times when inflation and gold have been negatively correlated, and when the dollar and gold have been positively correlated. Gold may be a hedge against inflation but, historically, only when people begin losing faith in their own central bank. Action in the equities market will tell you that people have largely been optimistic about the Fed, whether right or wrong, and despite the Fed’s numerous errors. With the Fed’s latest statement, announced in Jerome Powell’s keynote speech at Jackson Hole, it amounts to a big mea culpa. Will the investing public finally lose faith in the Fed along with the sense of optimism that continues to drive equities prices upward when they really should be tumbling down? It appears so in the market’s initial reaction. But the market is fickle, and American investors are generally stubborn, choosing to err on the side of exuberance rather than sound judgment.
It’s a no-brainer to imagine gold should rocket with inflation. This link is investing 101. Well it seems that information is obsolete because gold is stuck, all the while huge inflation numbers are splashing all over the world.
The U.K. has lots of mining companies and many good gold mines. Their values have been plummeting.
Here is an example: