GOLD 0.51% $1,391.7 gold futures

As I am currently seeing it, gold is not rallying higher because...

  1. 7,339 Posts.
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    As I am currently seeing it, gold is not rallying higher because the universal experience [and expectation] right now is deflation.

    Somehow, a 200% debt to GDP ratio for Japan, as the front runner in this competition to devalue, does not inspire fear or trepidation.

    The emerging markets are seeing inflationary pressures now that the $US has begun rapidly rising [they are carrying large $US denominated debts, courtesy of previously cheap and plentiful US QE]

    The potential currency war which might follow from Japan's latest tactic could be a devaluation of the Yuan as China's response ... so far their only response has been a fairly tame interest rate cut. But if that doesn't work, devaluation is an option .... which would create more problems for Russia since they have just signed that massive gas deal and agreed to be paid in Yuan.

    The growing public debt of the US makes any interest rate rise there very unwelcome. The EU appears to finally have decided to join in the game. Deflation might be the chief symptom but the problem is the debt. Everybody is in it over their ears.

    It is still very puzzling to me that there is not a greater rush into gold in an environment where every major central bank is actively trying to devalue their respective currencies.
 
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