Gold In A Paper Storm As Fear And Inflation Begin To Grip The World

The deluge is coming.

https://kingworldnews.com/gold-in-a-paper-storm-as-fear-and-inflation-begin-to-grip-the-world/

Inflation

 

Inflation and the Destruction of Democracy: The Case of the Weimar Republic

https://www.jstor.org/stable/4224593?seq=1

Peter Warburton: The debasement of world currency: It's inflation but not as we know it

http://www.gata.org/node/8303

What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies. Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.

It is important to recognize that the central banks have found the battle on the second front much easier to fight than the first. Last November I estimated the size of the gross stock of global debt instruments at $90 trillion for mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably, no more than $200 billion, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world's large investment banks have over-traded their capital so flagrantly that if the central banks were to lose the fight on the first front, then the stock of the investment banks would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.

Central banks, and particularly the US Federal Reserve, are deploying their heavy artillery in the battle against a systemic collapse. This has been their primary concern for at least seven years. Their immediate objectives are to prevent the private sector bond market from closing its doors to new or refinancing borrowers and to forestall a technical break in the Dow Jones Industrials. Keeping the bond markets open is absolutely vital at a time when corporate profitability is on the ropes. Keeping the equity index on an even keel is essential to protect the wealth of the household sector and to maintain the expectation of future gains. For as long as these objectives can be achieved, the value of the US dollar can also be stabilized in relation to other currencies, despite the extraordinary imbalances in external trade.

2016 Debt Binge Produces (Surprise!) 2017 Inflation. Guess What That Means For 2018?

http://dollarcollapse.com/inflation/2016-debt-binge-produces-2017-inflation/

Gold Performance During Inflation and Deflation

Many observers acknowledge that gold is a good hedge against inflation, as currencies are debased by central bankers. What they don't understand is that gold performs even better with deflation, which accompanies monetary disorder. They don't realize that gold is a safe haven asset when confidence in other asset classes dissipate, as they eventually do with government over-indebtedness and reckless currency and credit creation.

In other words, in a time of crisis, gold isn't just a commodity. It's a sound currency which will maintain its value, unlike fiat currency backed by nothing tangible.

Look at the chart of equities (S&P 500) vs. gold. Since 2001, the global economy has experienced two deflationary (or at least disinflationary) wipe outs. Inflation has been dormant--at least according to official CPI statistics (which is another boondoggle). Gold should have underperformed in that type of environment, according to conventional wisdom. Yet, during this time period of deflation, stocks have doubled, while gold has surged 3 1/2 fold. So the answer to the question: "when should one hold gold: to hedge against inflation or deflation?", is simple. It's both.

The Flawed Logic of Inflation

https://realinvestmentadvice.com/the-flawed-logic-of-inflation/

Could Inflation Break the Back of the Status Quo?

http://charleshughsmith.blogspot.com/2016/08/could-inflation-break-back-of-status-quo.html

Why We're Poorer: Inflation and Deflation Are Now Globalized

http://charleshughsmith.blogspot.com/2014/10/why-were-poorer-inflation-and-deflation.html

Clearly Europe Has A Crushing Deflation Problem... Oh Wait

This is the fundamental problem with neo-Keynesian economists:  they believe deflation is the biggest impediment to economic growth.  It is, to a certain extent--to the banking system, for starters.  But to the masses, rising prices against a backdrop of declining incomes is destroying the middle class and under class.

Injecting liquidity to solve a debt problem worsens the vicious cycle of more indebtedness.

http://www.zerohedge.com/news/2014-10-04/clearly-europe-has-crushing-deflation-problem-oh-wait

Ex-White House Official - Gold, Capital Controls & Inflation

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/8/22_Ex-White_House_Official_-_Gold,_Capital_Controls_%26_Inflation.html

This Will Trigger Major Dislocations In World Financial Markets

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/8/16_This_Will_Trigger_Major_Dislocations_In_World_Financial_Markets.html

Elliott's Paul Singer On Gold, Inflation, And The Global Monetary Delusion

http://www.zerohedge.com/news/2014-07-31/elliotts-paul-singer-gold-inflation-and-global-monetary-delusion

There is No Tradeoff Between Inflation and Unemployment

http://mises.org/daily/6771/There-is-No-Tradeoff-Between-Inflation-and-Unemployment

Key Metric Hits Same Level As Prior To The Great Depression

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/1_Key_Metric_Hits_Same_Level_As_Prior_To_The_Great_Depression.html

People Are In Danger Of Suffering Catastrophic Losses

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/5/18_People_Are_In_Danger_Of_Suffering_Catastrophic_Losses.html

100 Years Of Success? - Fed 'Inflation' Style

http://www.zerohedge.com/news/2013-12-26/100-years-success-fed-inflation-style

Inflation is Raging – If You Know Where to Look

I would add BitCoin to the list of tangible assets experiencing inflation.

http://dollarcollapse.com/inflation/inflation-is-raging-if-you-know-where-to-look/

Historic Chaos, Crisis & The War Between Inflation & Deflation

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/11/20_Historic_Chaos%2C_Crisis_%26_The_War_Between_Inflation_%26_Deflation.html

A 'Textbook' Case Of The "Untenable Trajectory" Of Inflation

http://www.zerohedge.com/news/2013-09-05/textbook-case-untenable-trajectory-inflation