RE:RE:RE:RE:Oil is cheap compared to gold Maybe I have been watching too much David Webb, Catherine Fitts and my favorite Marc Faber; it would seem that the central banks have been accumulating gold. If investment houses started increasing gold as well, the small demand we have would be suddenly increased many fold.
The gold price just went up with conviction over about the past week out of it's range, demonstrating strength.
These same pundits think inflation numbers could be much higher than published if the old metrics we used in the 1980's were applied. That means we could already be in a negative interest rate environment. This points to the need to hike interest rates to adjust for that imbalance.
I see confirmation of this theory in the very delicate langueage we are hearing about when interest rates might come down. Indeed, I dont expect them to. Volker raised rates 17 times to cool things down when he was at the helm and we are coming out of generational lows in interest rates. When I studied economics back in the 1980's, it was stated that 5% was a healthy interest rate. A balance of savings incentive and lending incentive. Personally 7% even better.
Focusing on oil - a commodity. It's not like a TV or cell phone that keeps coming down in price as the technology gets better. It's a limited resource. So it could only trend higher.
That is where I place my bets. Oil and gold up. A proxy for other commodities too. Goods and services that are inflation-sensitive should be closely watched.
GLTA