09 November 2010

Oldie but a goodie

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I'm really amused that gold is going back up in its bubblicious economic state again (or still). Supposedly this is because of inflation fears... except we don't have inflation at the moment, so it's kind of silly.

The logic of gold is much like that of real estate: "It never goes down, except when it does". The difference being that real estate is a tad more useful and is far more price supported by government policies (inefficient and silly as they may be). Both suffer from supply and demand shocks and it's not that hard to crash the price of either by watching monetary policy.

Really, these are better investments: guns, medicine, food. If you're really worried about some sort of inflationary disaster like the Weimar Republic that is. I'm not. We have lots of tools to squelch inflation at the moment available to us just as we had during the early 80s under Volcker's iron fisted rule over double digit inflation. We don't seem to be using the tools that actually create it. Certainly not to even those heady days of the Carter malaise much less the heady days of the Germans papering their walls with money and carrying wheelbarrows of it to buy their bread. Hence I'm not that concerned.

If I were, I wouldn't be buying gold. I'd be planning for a Fallout-style universe of blood thirsty raiders banded against the fractured remnants of society.

Update: Apparently the High Priestess Palin has decreed that there was significant inflation over the last year. Nevermind that we've had some of the lowest inflation on, to use her example food prices, in recent history. Nope, damn the inconvenient facts. It is decreed, therefore it must be so. I should go take all my money and buy gold instead starting to horde guns and food stocks also against the barbarian scum who will attempt to raid my little cave and campfires, according to her decrees.
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