hedgeman

Own Gold? Time to Fold

Inflation doesn't matter for the current price of gold. Total collapse is also not imminent. What matters is how to duplicate the wealth effect created by housing and credit bubbles.

And here the large quantity of gold and its wide dispersion among different types of stakeholders around the world is the easiest way to increase perceived wealth (and if you arm twist banks which government now owns to start lending again) and subsequently consumption. A sharp increase in the price of gold in the next few days would have the desired psychological effect as we approach xmas.

Disclosure: Stopped from gold longs last Friday.