shows gold overshooting and perhaps now undershooting on a correction. I don't think the chart shows inflation reversing to deflation over the long run, just a multi-year correction with deflation due to the hideous economy.
Posted on 10/31/2014 5:52:01 PM PDT by blam
Gold Core
October 31, 2014
Stocks globally surged, while gold fell sharply today despite renewed hopes that the Bank of Japan’s vastly increasing money printing will fill some of the gaps left by the apparent end of Federal Reserve bond buying.
The BOJ decided to increase the pace at which it expands base money to a whopping 80 trillion yen ($726 billion) per year. Previously, the BOJ targeted an annual increase of 60 to 70 trillion yen.
The BOJ sailed into deeper uncharted monetary territory with the announcement that they would triple annual purchases of exchange-traded funds (ETFs) and Japanese real-estate investment trusts (REITS) to 3 trillion yen and 90 billion yen respectively.
The Nikkei surged 5% in minutes to a seven year high after the Bank of Japan decision, while gold fell.
These unprecedented monetary events remind us of the old English mapmakers who used to write on uncharted territories on their maps - “Here be Dragons”.
The BOJ claimed the action was due to concerns that a decline in oil prices would weigh on consumer prices and delay a shift in sentiment away from deflation.
BOJ Governor Haruhiko Kuroda portrayed the decision as a preemptive strike to the ‘lost decade’ economy, rather than an admission that his plan to reflate the long moribund economy has so far failed.
The prime reason for the extraordinary monetary policies is likely that the Japanese economy remains very weak and risks tipping over into a depression. Bankruptcies more than doubled to 214 in the first nine months of 2014 compared with the same period a year ago. Japan has introduced quantitative easing to stimulate the economy and to spur inflation. But it may backfire and lead to stagflation and in a worst case scenario a German ‘Weimar’ style hyperinflation.
(snip)
(Excerpt) Read more at marketoracle.co.uk ...
I can’t wait to see the gold-backed Ponzi schemes that are going to blow sky-high over the next few days or weeks.
And of course the stock market went up on the news.
The price of gold is quoted in dollars, which is rising against the yen, and pretty much everything else. Gold should have gone up, if priced in yen.
For those surprised that the US stock market didn't crash in September and October, consider what is happening globally. Japan is crashing, China is a mess, Europe is a mess and breaking up, out of all the BRIC countries, only India is doing well. The US is holding up the world right now, and most currencies are falling against the dollar. This is why the stock market keeps climbing, and foreigners keep buying real estate here. The US is the cleanest dirty shirt.
“WTF?”
Here’s the short term answer; all that money is available to borrow for virtually zero percent interest. Therefore people will invest it in stocks, since interest investments aren’t paying anything. More money in the market drives up the price of stocks, which is bad for gold.
“Print more money, and the price of gold falls? WTF?”
That’s the phony price of paper gold, not the true value.
It looks like a buying opportunity to me. Time to back up the truck. Beep. Beep.
Party\\ like its 1999!!!
adoration of the golden calf
Who is the Nipponese Helicopter Ben?
Goldbug ping.
That’s the phony price of paper gold, not the true value.
Incorrect!! When gold is in the dumps physical gold is very abundant and available at the same price as paper gold
Right now the central bank money issuers/manipulators have been able to make the USD strong and oil cheap. Both are not good for gold and silver. How long will this last? A few more years of "irrational exuberance"
Meanwhile party on dude!!
They have caught the dreaded “Bernank-E-bola” virus.
Clarke and Dawe - Quantitative Easing
http://www.youtube.com/watch?v=j2AvU2cfXRk
That was good...thanks.
Seems like the Fed found an outlet other than Belgium for their printed Obola bucks.
I respectfully disagree. Only reason US stock market is on a high plateau is because of artificial zero interest rates by the Federal Reserve Bank. With CD’s paying 0.1%, and bonds paying record low interest rates, there is no place to put money to work except the stock market. Foreigners buying US stocks are paying double due to high stock prices and strong US dollar.
Seniors and savers are getting hammered due to the record low yields and they are forced to delve into more risky instruments such as junk bonds. While food prices, healthcare costs, utility rates, etc keep climbing. The Federal Reserve (FED) does not even have congressional oversight. The Fed is creating a stock bubble. Stocks are as overvalued now as in 2008 before the crash. The government created housing bubble with sub-prime mortgages backed by Fannie May. Every bubbles in every country always bursts with a bang.
Gold prices are simply telling us that this economy is not in any shape or form healthy and will roar any time soon.
.and part of every single government payday-check, goes to a stock market fund.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.