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GOLD the great inflation indicator

|Includes: SPDR Gold Trust ETF (GLD)

I am sick of Austrian Economists touting gold as the only absolute way to maintain purchasing power. 

It is a trade. That's no secret...

However, I find it extremely disingenuous to suggest that gold is somehow  a current measure or predictor of inflation.

It's a trade based on the conspiracy theory that ALL civilized governments are going to debase the currency to nothing. While that idea seems sound in theory. The practicality of that happening and the COMPLETE economic devastation created by that event seems highly improbable. Considering both the EU and United States propensity to take measures to do what is least painful. A coordinated effort by the world to prevent that actually seems the most probable.

Now to the fundamentals of that trade.




According to the five year chart in USD terms. We should expect approximately 303% inflation over this period or have predicted it out a couple years.

I'm not knocking the trade. Gold bugs have outperformed the market handily.  I just get sick of day in and day out pundits and gold bugs screaming "Inflation is coming" and pointing to gold as the reason. It's just another way to scare the masses into hoarding gold. But when they are done with it and are more interested in natural gas or silver, those same gold cockroaches... I mean bugs are going to dump it.






Disclosure: Author has no position in gold but hates gold, but is too scared to short it