Messing Gold

They really got carried away, though in the context of that time there seemed any number of legitimate reasons for this. Gold investors were bidding up the precious metal like there was some kind of shortage, the price in dollars making a new record high (LBMA morning fix) on August 7. The way it was reported in the mainstream, this was more confirmation of Jay Powell’s flood of money printing making its way into every last corner of the financial world driving gold bugs nuts in the process (as intended).

Nah.

A few days before all that, the 10-year US Treasury yield had sunk back down near its crisis extremes. On August 4, the note finished trading to rate just 52 bps, less than the previous record low close-set March 9.

Since early August, gold and the long end of the yield curve (as well as the shape of the short end) have merely continued their close coincidence of inverse behavior. It just isn’t a coincidence, of course, the mainstream view of gold is almost all backward and has been for a very, very long time (like everything else when it comes to money, finance, and economy).

Dating back more than two years now, gold prices have been pushed higher by deflationary expectations like those embedded within lower and lower risk-free rates represented in the longer UST’s. Gross financial distress of the global dollar shortage kind, totally the opposite of the inflationary flood we keep hearing about.

Gold is actually rising instead on concerns that central banks and governments around the world will fail in their collective efforts to support already deflationary economies…As always, money-less monetary policy comes down to ridiculous, easily disproved deception. Other than that, there’s nothing else in the official central banker toolkit. Realizing this, you might then understand exactly why gold and bonds are being bid concurrently in this way.

Now that gold prices are falling, you hear very little about them – in favor of the increasingly ridiculous BOND ROUT!!!! resurrected by this Inflation Hysteria #2 which suddenly can’t include rising gold prices.

1 2 3 4
View single page >> |

Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.