Post by
peep2 on Mar 10, 2017 12:43pm
In 1980 gold was highest when inflation was highest
And when interest rates were highest for that matter.
Always keeping or allowing inflation to go higher than
the interest rates, until Fed chief Volcker thought inflation
was too high and penalizing to everyone.
After some false signals in that mid 1970s to kill inflation,
gold went back up, till 1980's real final signal that inflation
was going to be killed off. That was by placing interest rates
higher than the inflation rate and keeping it like that.
However Increasing interest rates with no intention of
slowing the economy but to either (1) keep the economy going
as in the 1970s' OPEC oil embargo days of raising oil prices
that raised inflation that raised gold, (except for a few false
killing off inflation signals)
or
(2) to normalize rates as in the present instance,
are
bullish for gold.
What the FED, paper gold exchanges of the west, and
futures markets are doing to gold right now is all mixed
up and wrong. Likewise the signal it's giving to the stock
markets to sell off gold stocks.
They are false signals of killing off or slowing inflation and
the economy, (as if they are overheated) like a few false
signals of that in the mid 1970s (but of OPEC's embargo
raising of oil prices and inflation because of that). Where
after the false signals, all of, interest rates, inflation and
gold, prices, resumed going up.