Gregory,
"When Money Dies" by Fergusson (first name escapes me, Alan, Adam?) is an excellent study of the Weimar inflation and the destruction of the mark. Essential background reading for anyone who wants to understand what von Mises was describing when he talks about credit bubbles always ending in ruin, either voluntarily or inevitably.
The historical experience (US in the 1970s and early 80s) is that the gold price can explode while interest rates are rising, until rates rise to a point where the inflation-adjusted return on treasuries is greater than the genuine rate of inflation (Gibson's Paradox, which also explains why the gold price must be controlled by central banks). The American experience was Treasury returns approaching 20% before the gold price rise was broken. History rhymes, so I would predict that interest rates rising 2-5% would do little to stop the price of gold, while making the US govt's debt burden unbearable.
You also asked about gold production increases in the near future. I think we are seeing consistently declining production from South Africa, Peru had a bad year, and I believe Australia's production was down also. China is a growing producer, but their gold never reaches the international market. That is also the case with other producers, and is likely to be the case with even more countries going forward. So I would make a disctinction between absolute production (which is fairly constant overall and falling in some leading producing countries) and new production that actually reaches the world market. I see little chance that production reaching the world market will increase appreciably in the next few years. Also permitting is becoming more difficult, smaller discoveries are being made in areas without water and mining infrastructure, govt taxes and royalties are making marginal mines unprofitable in many countries, the rights of indigenous peoples are being considered more strongly, etc. No reason I see to expect world production reaching the market to rise sharply.
GLTALs,
RTR
