Lance

Buying Gold to Keep Up with Inflation

The bad news for equities is probably bad news for gold as well.

The Fed is not entirely stupid, and it realizes that the excess money creation has to be reversed as soon as economic conditions allow. They will probably act sooner than the equity market will prefer, and that may keep demand well at bay, which would not promise any return for gold investors either.

Inflation really takes off from a *combination* of money creation and strong goods demand. We'll have to wait for the latter to really materialize before we can understand Fed strategy, and if it is in front of or behind the curve. But we may have a while to wait for demand to develop to a point that it begins to push inflation. And without serious demand: no serious inflation.

How Long Before the Dollar Fails?

You will be right when demand returns. Absent demand, you will continue to be wrong. Eventually, you may be right. But you may also be wrong for quite some time until that transpires.

As long as productive capacity far outstrips demand, inflation is simply not going to happen.