Posted on October 4, 2015 by Martin Armstrong
i read your latest piece on gold…..i see your rationale for inflation not causing gold to rise but rather an erosion in confidence of government
so if i am reading you right you see a rise in gold in a semi-rapid fashion for the next few years as the confidence in government declines now semi-rapidly
so …..what we have here is….
but the reasons not as spoken by the inflation gold guys
is this correct…
I thank you for your time
ANSWER: Exactly. It is critical that if you buy gold based upon inflation then you will lose money when that idea proves you wrong and you will not get out when you should. You will donate to the professionals and make the bankers rich. It is important to understand what moves a market for only then will you enter and exist without losing your shirt. Why hold something that declines for several years and waste all your efforts and resources on something that you could have made a lot of money in a different market and then return to gold with a lot more cash buying low rather than high. Of course if you do not want to be accused of manipulating markets, then BUY HIGH and SELL LOW. The bankers will send you a Christmas card maybe.
If you just run a correlation of inflation to gold you will see that gold does not respond simply to changes in money supply. You can say I am wrong all you like. But the numbers are the numbers. Gold has not yet exceeded the 1980 high adjusted for inflation. Cars I bought back then are more than 300% today. Gold would have to be about $2700 to match that today compared to a German car. The Dow was 1000 in 1980 but it reached the 18500 area and gold would have had to rally to $16,000 to match that. So explain that one. Why fight the trend? It makes no sense. Is this about making a good trade, or trying to prove some theory is correct?
Even the argument for hyperinflation these gold promoters do not understand and have brainwashed people so they get mad at me instead of getting pissed off at the clowns who duped them. They assume the cart is before the horse and that gold would rise BECAUSE of an increase in money supply. But when you look closely, the German Hyperinflation was a communist revolution. Any one with money hoarded and did not deposit it in banks. The money supply increased BECAUSE confidence declined FIRST. These promoters screw everything up just to sell gold and tell any story for they are not analysts, they are selling something no different than a used car salesman. It is always CONFIDENCE that collapses and that causes government to increase money supply.
Right now, Congress pushed off the debt ceiling they thought until December. Treasury says it will run out of money by November, one month before the politicians assumed. They have noted that tax revenues are dropping rapidly. These morons cannot figure out that raising taxes reduces net disposable income and that means lower GDP and higher unemployment.
The rise in gold will come ONLY when people start to realize we are in a lot of trouble here economically. The dates we have provided in the reports. Others say I am wrong and that people are buying gold in record numbers. It is amazing how people can’t get this in their head. China is turning down. Now the say the Fed will have to go into QE4 so buy gold, It gold declined after 2011 with constant QE and in Euros we are now in the second year of QE there, this argument is just wrong.
Each population measure wealth in terms of their own currency; not in dollars. So if you you want to fool yourself, go ahead. Are you just repeating what the promoters are telling you? Others will sell or buy based upon their home currency. You do not see gold making new highs in anything. The test of a REAL bull market is new highs in all currencies – not just one. You do not buy gold because it is rising in Mexico peso. You buy only when it makes a profit in your own currency. Profits are personal based upon your home currency.
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