The duplicity of inflationSome investors can clearly see inflation as a double sided coin with two faces, while many only see just one side of it.
Gold has often been regarded as an inflation hedge.And so it would make sense to buy it when inflation begins rising or in anticipation of it.
Why then does gold consistently drop with every hint of a rise in inflation, with every CPI release and Fed reaction to it.
The POG is easily manipulated this way whenever the Fed so much as hints at tightening the screws - the dollar then rises and gold retreats in its wake.
The other side of the inflation coin see's gold rise with it and the dollar retreat when the Fed takes the foot off the tightening accelerator with a pause - further translated via anticipation of lowering interest rates.
This is what the earlybird crowd already buying gold see - clearly both sides of the coin.
The vast majority of investors, or the mainstream - see only the side of inflation the Fed wants them to see (hence, the endless manipulation at the expense of the price of gold).
The Fed keeps the masses in check having them believe in perpetuity, they have and can keep inflation under control. So far so good keeping them from seeing both sides of the inflation coin.
Rigging the CPI through a great deal of ommision of factors that contribute to inflation overall, result in under-reporting real inflation that keeps the POG artificially supressed. In turn, the dollar stays elevated and plays to a large extent into the overall manipulation of gold.
Where the POG sits currently can be attributed largely to that much smaller crowd of investors and players in the market.
The other side of the inflation coin won't be seen by the overwhelming numbers of mainstream investors until the Fed loses face entirely with the inflation fight and their manipulation for what it is in its entirety is laid bare before them.
That time is not far off with the growing debt monster starving for much more QE the Fed will most assuredly and soon enough be feeding it.
When inflation gets out of hand again , it will be too big a problem for the Fed to curtail it with renewed interest rates under double digits. Anything over double digits will only blow the debt monster, economy and country to peices.
The manipulation of gold is what's going to blow up and blow up in their faces it will. The only side of the coin of inflation pertaining to gold seen then will be the upside - as it naturally should and will soon enough be.
The downside of that coin of manipulation will be left facing down where it truly belongs.