Good thoughts. Let me throw this in. Is gold effected by inflation? Isn't gold the harbor against inflation? Comparing dollars/money makes sense, it is the "root" of inflation. Personally I think gold is outside the inflation spectrum. I know it's a comodity, but I think valuing it over time, inflation doesn't have the "yearly" impact most think it does. Going back to the Inca's then the valuation would be around a million dollars an OZ. Just having fun ; )
agreed, the USD is the key and it's behind the spike. Scarcity factor in gold makes its moves wildly exaggerated.
In the 1990's the US and Britain ganged up on the gold bugs with big central sales to punish those inflation bets. Now the tables have turned. The central banks can't afford since China is playing "hardball" and saying they will triple their gold reserves at the same time the Arab world wants to wreck the US economy and Dollar and divert oil trading from Dollars to Euros and gold.
Looks like a deflationary crash into the Fall will take stocks and inflation hedges dramatically down.
This could be a 1987 style crash or a 1998 Long term capital style debacle with bad hedge fund bets on low volatility.
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