gabemolstre

Is Gold a Good Investment During the Credit Crunch?

Where is Ron Paul when you need him.


On Jul 13 03:46 PM Moral Hazards Amok wrote:

> Inflation! You hit the nail on the head.
>
> Gold will continue to be a good investment as long as the central
> bank keeps inflating the M3 money supply at over 16%, making gold
> an attractive safe heaven from the Fed’s destruction of our fiat
> money supply. Inflating the money supply above that of GDP is the
> ONLY real cause of inflation, btw.
>
> Ok, how long will this continue you may ask?
>
> A long time. The central bank, which is made up of human beings acting
> in their own interests, will inflate the money supply (M3) as long
> as they can get away with it, probably for at least 2 or 3 more years.
> This inflation pushes the credit crunch and employment problems out
> to the next administration and also greatly benefits the shadow banking
> system, which was the real objective of inflation in the first place.
>
>
> Two or Three years, are you kidding? But I thought that inflation
> was caused by unanchored expectations, and increasing wage demands,
> (you say)?
>
> No, that’s what Uncle Ben and the old Keynesian and Phillip’s curve
> crowd wants you to believe but in fact those people were thoroughly
> discredited back in the 70s. Unfortunately, we have that same crowd
> running the money show now making the same terribly policy blunders
> today that were made in the mid-70s with the same results, and just
> like the 70s, inflation AND unemployment will continue and get much
> worse. Obama’s team also holds the same discredited loose money views,
> so don’t expect any changes there if he wins.
>
> Wait just a second! Won’t demand destruction, deleveraging, and a
> sour economy put the breaks on inflation???
>
> No. That’s what the old Keynesian Phillip’s curve crowd told us back
> in the 70s too, and look how that turned out. Back then unemployment
> was over 10%, the economy had negative growth, and yet still inflation
> was at double digits and spiraling ever higher. High unemployment
> and a tanking economy did NOTHING to stop inflation because in the
> real world inflation is nothing less than a reckless increase in
> the money supply.
>
> The day gold is no longer a good investment is the day when the Fed
> gets serous about controlling the money supply and I don’t see that
> happening anytime in the foreseeable future, because Greenspan, Ben,
> and the rest of the Phillip’s curve crown is still is in charge.
> Stay long on gold till otherwise.