NEW YORK (Reuters) - The end of Federal Reserve emergency cash is unlikely to derail gold's 10-year rally, but the precious metal might face a rockier road as the cheap money that had fueled its ascent dries up, at least for now. Fund managers have cited the threat of deflation, slower growth, a resurgent dollar and gold's over-valuation as just a few reasons why precious metal's performance as a safe haven is unclear. In the past, its value tended to rise in times of economic crisis.
The suggestion was somewhat indirect and conditional, but it is nonetheless fascinating that the head of the World Bank should bring up the idea of using gold to help stabilize the international monetary system. Robert Zoellick was far short of calling for a return to the gold standard, but he did say that the "system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.
... World War resumption of the international gold standard, underconsumption (reinforced by so-calleed debt deflation), productivity shocks, and monetary policy. . Thes...
According to London's Inde- pendent, the Arab oil producers in the Gulf are planning wim China, Russia, Japan and France to end dollar transactions for oil and move instead to a basket of cur- rencies that might include die Japanese yen, the Chinese yuan and the euro, along with gold and some kind of regional Gulf-state currency. The Fed is fighting deflation with a near-zero interest-rate target, while gold, the dollar and commodity markets are signaling 'mat inflation is the real problem. Monetary restraint and the incentives of lower tax rates will solve the dollar and unemployment problems.
FORT LEE, N.J., Aug. 4 /PRNewswire/ -- According to the National Inflation Association - http://inflation.us - the amount of deflation rhetoric in the mainstream media has been continuing to surge this week. Yesterday there was an article in the Wall Street Journal entitled, "Defending Yourself Against Deflation" and on Monday Paul Krugman wrote an editorial in the New York Times entitled, "Why Is Deflation Bad?". We decided to do a simple Google News archive search to see when previous spikes in media chatter about the topic of deflation have taken place. The largest spike this decade in articles about deflation came in May of 2003. At that time, the Dow Jones was 8,500, the price of gold was $350 per ounce, and the price of oil was $30 per barrel. The Dow Jones went on to rise for fou...
... policy for strengthening the dollar, driving gold and commodity prices down, and creating unsustainaable deflationary pressures in developing countries. While the Unite...
Lawrence Kudlow is on to something ("Shock-and-awe easing" Commentary, Friday) about what must be done to reverse the current economic decline. He tells us that while money-supply measures are inflating, consumer reports are showing price deflation. He points to the problem being the dollar's value relative to gold and other commodity prices. S. government policy followed the constitutionally mandated gold standard for 180 years (with a few short intervals), making nothing but gold and silver the basis of our dollar. During almost all those years, the U.S. dollar, with its gold guarantee, held a stable value that could be counted on year in and year out. Money is not just a medium of exchange, but a store of predictable value. Solid money stabilizes general price levels and sharply re...
... price too low, and the result will be deflation, which is not exactly a healthy state for an econo...
If the operation of the gold standard from the last two decades of the nineteen... countries and pass the burden of deflationary adjustment shocks to peripheral debtor countries. ...
NEW YORK, July 14, 2011 /PRNewswire/ -- The World Gold Council today releases its Gold Investment Digest, analysing the current economic and financial drivers of the global gold market. The Q2 2011 report shows that gold outperformed most major assets, including commodities, throughout the quarter. In addition, gold's low average volatility of 13.4% for the quarter is well below its long-term 20-year average of 15.8%. Juan Carlos Artigas, Investment Research Manager at the World Gold Council, commented: "While commodities exhibited heightened levels of volatility and sharp falls in price during the month of May, gold's volatility was modest and its price remained stable.
... countries will face high inflation or deflation in years to come. In that context, gold has an imp...
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