Post by unlawflcombatnt on Jan 15, 2008 4:53:32 GMT -6
Peter Schiff on inflation and the price of gold:
January 11, 2008
It's Inflation Stupid
January 11, 2008
"Holding onto its "all is well" bias like a terrified cowboy on an enraged bull, Wall Street has managed to convince itself, and much of the world, that inflation is a non-issue. When confronted with facts to the contrary, their rationalizations come fast and thick. Nowhere is this spin more pronounced than in their dismissal of the surging price of gold as a relevant indicator.
Rather than favoring the logical conclusion that the rise in gold prices results from an inflationary expansion of money supplies around the world, Wall Street has credited its rise to other factors. The most common explanations include strong economic growth, rising jewelry demand, speculative buying, higher oil prices, the weak dollar, terrorism, uncertainty, middle east tensions, volatility, supply and demand, etc. Every possible explanation is offered save one, inflation.
Some explanations, such as a weak dollar, have some validity, but miss the point that the dollar is weak as a result of inflation (i.e. too much money creation by the Fed). In my commentary from September 30, 2005, I noted that rising gold prices were the inflationary equivalent of the canary in a coal mine. However, rather than fleeing for better air, Wall Street miners merely go about their business confident that the bird succumbed to natural causes....
and 2007 import prices rising by 10.9%, the largest calendar-year increase since 1987. Basically the Fed is sending the message that inflation is going to get a whole lot worse and that it couldn’t care less. As the price of gold continues to climb as a result, look for more excuses to minimize the significance of the move.
Further, as the price of gold approaches the historic $1,000 level, get ready for the pundits to proclaim the market a bubble. Of course, those same experts could not see the bubble in tech stocks in the 1990s or the larger one in real estate that followed, but they have no problem spotting a non-existent bubble in gold. The bubble crowd was particularly vocal back in April of 2006 when gold first broke $600, prompting me to write a commentary that parodied David Letterman’s Top Ten List with respect to the signs of a precious metals bubble, and another which poked fun at a commentator who confidently promised to eat his hat if he was not witnessing a precious metals blow-off top in the making...."
www.europac.net/newspop.asp?id=11400&from=home
January 11, 2008
It's Inflation Stupid
January 11, 2008
"Holding onto its "all is well" bias like a terrified cowboy on an enraged bull, Wall Street has managed to convince itself, and much of the world, that inflation is a non-issue. When confronted with facts to the contrary, their rationalizations come fast and thick. Nowhere is this spin more pronounced than in their dismissal of the surging price of gold as a relevant indicator.
Rather than favoring the logical conclusion that the rise in gold prices results from an inflationary expansion of money supplies around the world, Wall Street has credited its rise to other factors. The most common explanations include strong economic growth, rising jewelry demand, speculative buying, higher oil prices, the weak dollar, terrorism, uncertainty, middle east tensions, volatility, supply and demand, etc. Every possible explanation is offered save one, inflation.
Some explanations, such as a weak dollar, have some validity, but miss the point that the dollar is weak as a result of inflation (i.e. too much money creation by the Fed). In my commentary from September 30, 2005, I noted that rising gold prices were the inflationary equivalent of the canary in a coal mine. However, rather than fleeing for better air, Wall Street miners merely go about their business confident that the bird succumbed to natural causes....
and 2007 import prices rising by 10.9%, the largest calendar-year increase since 1987. Basically the Fed is sending the message that inflation is going to get a whole lot worse and that it couldn’t care less. As the price of gold continues to climb as a result, look for more excuses to minimize the significance of the move.
Further, as the price of gold approaches the historic $1,000 level, get ready for the pundits to proclaim the market a bubble. Of course, those same experts could not see the bubble in tech stocks in the 1990s or the larger one in real estate that followed, but they have no problem spotting a non-existent bubble in gold. The bubble crowd was particularly vocal back in April of 2006 when gold first broke $600, prompting me to write a commentary that parodied David Letterman’s Top Ten List with respect to the signs of a precious metals bubble, and another which poked fun at a commentator who confidently promised to eat his hat if he was not witnessing a precious metals blow-off top in the making...."
www.europac.net/newspop.asp?id=11400&from=home