Trelvin

1 Comment

    • ON: Thu Apr 3rd 03:28 AM
      Commented on:
      The Myth of Gold as an Inflation Hedge
      When you increase M1 substantially, you increase the velocity of money-the number of transactions--so it is that opportunities are created to RAISE prices before the next transaction takes place.-and buying Gold, knowing that it's price upward just reflects that, means a new "bubble" can form -- all those holding who realize suddenly that someone now is about to make the next transaction.
      The bet is that speedy transactions will come to gold but those transactions may not go into gold if value is found elsewhere. So banks selling gold to create value is not a bad idea; until velocity tanks the price on its own when that is perceived as its only intrinsic worth. Would you carry gold and water in the desert for very long?
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