The Federal Reserve, the European Central Bank, and the Bank of Japan have injected all that money into their national, and into their international systems; buying assets in the financial markets releases their Blue Peter vault contents.
Every central banker , every academic financial expert, any propagandist - ,journalist or guru - always stands to benefit by talking up assets.
But I should have panicked sooner rather than merely gossiping about pre-announced catastrophes. Fortunately Mr HG was getting us out of fixed interest, though the stock exchange hurts him a bit.
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8 comments:
I was crap at economics Hats, should we have had Brown selling all that gold?
Not at that price, Scrobs, whatever you think of holding gold. He might as well have been handing out ingots in the street. A slow download of the holdings at a good price would have been my choice, but then I rate me as an economist much higher than Gordon Brown (and is that saying something!)
I'm not a gold-holder believer because I think small people who live inside the cocoon of their inherited wealth, carefully maintained and renewed, and supplemented by their own earnings shouldn't dream of seeking a gold price rise when they could be enjoying capital appreciation in an object they can use and enjoy. The monetary use of gold is gone for good as states know and private individuals ought to know but haven't fully accepted.
In an uncertain world some hold a dubious asset, gold, simply for diversity; or so great is their pessimism they expect the four horsemen to come to the aid of the gold price - but then - is that the sound of hooves?
Sackerson at Bearwatch is really your gold advisor, and holds another view.
Gold works in a crash - the old instinct of hoarding calls once again.
Printing all this money will gaurantee further inflationary pressures and more interest rate rises.
Stagflation will set in. I just hope not on the 70's scale.
We may not have much longer to wait, to find out whether derivatives are a contributory factor in all this, HG, or whether they serve to dissapate the risks.
Much as I like a good a priori argument (10 minutes, or did you want the full 15 ?), my main hobby is collecting empirical gems.
HG - I'm not naturally a gold bug, but as CU says, it's a form of protection. Without being force to relate money to something else that's scarce, it seems governments and banks cannot resist stealing your wealth through inflation. Stock up on cowrie shells now?
The more enthusiastic gold supporters do think that when a currency panic sets in, there'll be a bubble in gold and a killing will be made by those who get in before, and get out before sanity returns.
As it happens, I sold out our modest holdings Monday because I have debts to settle and bills to pay, notably yet another from the financial regulators who are part of this bullying bureaucratic superstructure to which you often refer.
But I plan to get back in the market soon enough, on a variety of macroeconomic themes - commodities, energy efficiency, environmental cleanup, Asian commercial property etc. And gold.
I've tried to put this cash injection into context:
http://theylaughedatnoah.blogspot.com/2007/08/not-so-funny-money.html
How's the new washer?
'I sold out our modest holdings Monday because I have debts to settle and bills to pay,'
That's what Germany and Italy want to do too, isn't it S? Only there is always such an outcry from the opposition, right or left, it's such a tired old attack horse for the non-government parties, because of gold's historic purposes I suppose and now having all this mystique round it.
Releasing all that money has to threaten higher interest rates against inflation, but things are in a bad way with floods and disease and poor sales and housing slowing up and much higher unemployment than official figures show and food price rises bound to arrive very soon - an interest rate rise is the last thing for all that.
The full 15 minute argument in the circs, ND, would be very interesting.
To be in a situation when gold works, CU is a bit like being caught in a city in a sack - don't be was always the advice; you have to be right about stagflation, that might be the best to be hoped for.
Going round and round very quietly, S it even weighs up the washing before it spins to distribute it evenly and avoid the walking washing machine syndrome.
Off to read the link.
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