Thread: stagflation — inflation coupled with slowing growth

stagflation — inflation coupled with slowing growth

Last week, I read two articles on gold. One, in U.K. daily The Independent, was very bullish. The other, from the U.S. financial Web site MarketWatch.com, was bearish, and favored equities no less!

From my contacts, it is clear that some of our readers are equally confused as to the outlook for the alluring, yellow metal. So let me offer an opinion.

Confusion is entirely understandable. This is because there are two major forces tugging at the underlying price of gold, the two, contrary forces of stagflation — inflation coupled with slowing growth — which are currently and unsurprisingly causing great confusion to our government, the Fed and to many of us investors.

As we warned over a year ago, to the astonishment of some at the time, our economy is heading towards stagflation. It is caused by a subprime-induced economic recession and low cost, liquidity-driven financial inflation, both at the same time.

As we have also warned repeatedly, stagflation is a central banker’s nightmare. That is why we have had such sympathy for Fed Chairman Ben Bernanke, who I believe was handed a poisoned chalice of government-driven stagflation by the very “politicalâ€

Despite increasingly frantic denials in the mainstream media, we have sought constantly to forewarn our readers of approaching recession.

Ya.....all the members of the "tin hat" club that weren't so "crazy" afterall. Heck otherwise we might be psychic if it weren't for plain old common sense gettin in the way...

OK, are these investors simply investing in gold as they would stock, as in something to keep in a bank vault and hope it increases in value for future gain?

Or are they buying gold to be used in lieu of the dollar to have something with which to purchase our necessities?

The are saying... the value of the dollar is plummeting and will go down in value more as the fed cuts rates

He is basically saying get out of dollars if you have money to loose; protect it

The big issue I wanted to point out was this statement

As we warned over a year ago, to the astonishment of some at the time, our economy is heading towards stagflation. It is caused by a subprime-induced economic recession and low cost, liquidity-driven financial inflation, both at the same time.