Economic Deflation is Bad For Gold Prices: Inflation in Retail Prices are Deflationary For The Economy, More fiat dollars spent to buy fewer goods and services – July 23, 2021,
At present the fiat markets have escaped from reality, Wall Street is high on the hog, and the markets which have become accustomed to wasteful government spending are becoming jittery. If you can afford the loss, buy Gold, I’m a gold bug, but this economy is clearly deflating, prices are going up and Western economies aren’t even opened yet.
Consider the free cash giveaways by the government a bill we all have to pay later. Well, I mean if you hold Gold you will be rewarded later, but most transactions are still done in fiat cash and a lot of people are fiat cash poor and get poorer with every passing day.
Joe Biden when I listen to him appears 100% clueless about the economy, I genuinely don’t think Joe Biden understands that for every government action, there’s a market reaction, Joe Biden and Kamala Harris in many ways were made the president to defeat Donald Trump and not because they had any skills to fix the economy.
Joe Biden is best when he does nothing, I prefer when he blabbers and does nothing like a good president should. Via his executive orders, America now has a virus-spreading border crisis, which is an expensive DEFLATIONARY border crisis, more money is now going to be needed to fight the pandemic, which a lot of Americans welcome because they can hopefully get paid money not to work
But real money is tied to labor, which is why real money like Gold is a storer of wealth. Now if employees and Americans, in general, were smart, they’d demand to be paid in Gold, Instead of working 2 weeks for $2000USD as example ask the employer to pay you in Gold Bullion? Don’t work for a wage, work as a contractor, as a Trust, or some other legal entity, that allows you to write off your expenses.
Because I believe the fiat dollar has decoupled from labor, fiat money is literally becoming a hot potato, but don’t be silly enough to believe that there’s no demand for U.S dollars. The Eurodollar loves the Federal Reserve, the Eurodollar infostructure is as beautiful as it is destructive.
Don’t be one of those silly people, who imagines that everyone will see the world the way you’d like them to see it. Tell me lies, tell me sweet little lies is how the majority likes it, so get out of your comfort zone, and listen to how your fellow countrymen/women speak.
They’re clueless and when deflation occurs, they’ll demand more dollars from their government. Put a name on it government climate change stimulus, build housing for the homeless stimulus. Something anything, they’re going to demand it and I suspect the price of Gold will drop when it happens.
Because the fiat markets are decoupled from reality more fiat dollars will buy fewer goods and services meaning the people who buy Gold for a quick flip will sell. Most people are OVER LEVERAGED! I know a lot of rich people, who do not buy assets for cash flow, they buy assets for capital appreciation, now on paper they’re richer than I am, but they have what I consider to be a lot of risky bets on their balance sheets.
This is the new normal and it equates in my view to a decline in the price of Gold first before the real rally begins. When the Gold rally begins it won’t stop until interest rates are NORMALIZED and what normalized means in this market is beyond my comprehension. There is too much malinvestment and misinformation for anyone to comprehend what normalized interest rates would be in this environment
The Goldrush begins when debt servicing is completely detached from the cost of labour!
Interesting times ahead!