Dear Comrades In Golden Arms,
Equity markets are sharply lower, the Euro is sharply lower, commodities are under significant pressure. Gold opens lower and recovers $16 from the low to be up on the day.
1. The type on inflation being discounted by Gold requires business activity to be putrid.
2. This type of inflation is hyperinflation, which is a currency event, not an economic demand phenomenon.
3. Rather than a singular currency loss of confidence igniting hyperinflation, it will be all Western currencies moving against each other with intolerable to business volatility.
4. All Western governments will practice QE to infinity, as we return to credit market problems. The statement of the G20 and Prince Charles cutting down on caterers is all smoke and MOPE.
5. Gold is NOT a commodity.
6. Gold is a currency
7. Gold is the currency of choice.
8. Gold is going to becoming the reserve asset of choice by central banks
9. Ownership of gold means you are your own central bank.
The arguments between inflation and deflation revealed itself today to be purely semantical.
Gold is headed in this move to $1650 with its normal drama.
- Jim Sinclair