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Alan Brochstein » Comments » ABX

  • Gold Mining or Gold Bullion Stocks for 2009? [View article]
    "Given the massive amount of money being pumped into the global economic system, higher prices down the road are a given."

    I don't agree with this premise at all. The money being pumped in is more than offset by the wealth destruction and consequent demand destruction in the economy. Tomorrow's Household Debt Survey, released quarterly, will again show clearly what is going on: A shift to government from other sectors rather than an increase in total societal debt. Those who feel the Fed's monetary policy are like cancer patients who reject chemotherapy because they may suffer an adverse reaction. If inflation is the ultimate consequence, it will be because the economy recovers and the monetary (and fiscal) stimulus isn't removed. I expect that the economy is years away from any sort of semblance of a recovery and thus believe that those investing in gold (or I guess gold stocks) will suffer capital losses waiting for their expected payoff.

    Mar 11 09:15 am |Rating: +1 -2 |Link to Comment
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