Inflation and Gold

Gold, of late, is showing a seldom seen characteristic.I still hear some saying "Gold is down", I don't get it.In the last 30 days gold is up over 4%, as of this moment.What's strange is that the dollar is also up, at least against two main European currencies, the British Pound and the Euro.

Neither the markets nor gold, under normal conditions, respond positively to a strong dollar.I guess that's the point.The markets are responding as expected and gold is not.These must not be normal conditions.You get that sense like the days before Mt. St. Helens exploded.First, there were small earthquakes, then avalanches in higher elevations, then a series of small eruptions of steam and ash and then finally the mountain exploded.

That's the sense I get about our mounting debt.We just passed the $13 trillion debt level on our way to a projected $14.3 trillion by October.Everyday, more of what comes in is dedicated to paying interest on debt and the pressure is rising.Europe's own problems are serving to hold our situation together.People are seeking refuge from a flood of debt by climbing a mountain getting ready to explode with inflation.

Now the administration is talking about mini-stimulus packages.I liken these to the small steam explosions in the days before she finally blew.More inflation pressure, more debt!We keep moving in that direction and the only thing constant seems to be rising gold prices.

That said, my gold price prediction before this long weekend is simply that all signs suggest we are going to get more of the same.In Europe gold demand is steadily on the rise even though it gets more and more expensive in terms of their currencies.In the U.S. gold is gaining strength as an inflation hedge and in Europe as a hedge against default on debt.

All I know is there are very few investments whose charts even come close to resembling the gold charts.

Before I wish you all a good weekend, a moment of silence from me for those who fought for our right to carry on.

. . . . . . . . . . Be safe out there!