Does the Price of Gold Rise or Fall in a Deflation?

Mac Slavo
June 29th, 2009
SHTFplan.com

Read by 25 people

Adrian Ash of BullionVault.com writes Gold & Deflation: A Trick Question.

Indeed, Japan is the only developed nation since the end of the Gold Standard to have suffered an extended deflation in prices. So far, at least. Germany and Switzerland look set to try for a re-wind, and unless the Dollar can outpace the Euro’s descent, we might yet see truly sub-zero inflation in the United States, too.

Â

But whatever that should mean for Gold Prices, all other things being equal, just doesn’t matter. Because the gold price will not get chance. All other things are not equal, and the policy solution â€“ rank devaluation â€“ can only make gold more appealing to investors and savers, whether the “monetarist experiment” of TARP, quantitative easing or a half-trillion euros proves successful or not.

Â

Japan’s slump into deflation coincided with the Bank of Japan’s “zero interest rate policy” (ZIRP) at the start of this decade. It also saw the Gold Price worldwide hit rock-bottom and turn higher, a move that analysts (including us) have typically linked to US monetary moves and investment cash looking for safety as the Dotcom Bubble exploded.

Â

But zero-rate money from the world’s second-largest economy shouldn’t be ignored. And today, zero-rate money is all the developed world has to offer â€“ a trick that might not beat deflation, but might just spur a whole new rush into gold.

Gold in Deflation: Japan’s Experience

goldindeflation1

source: Stat.go.jp.Boe

Comments: Looking for a safe investment during a global economic crisis? Hint: Try gold. It rises during inflation. It rises during deflation.

Read the full article…

Â

Please Spread The Word And Share This Post

Subscribe to our newsletter

Author: Mac Slavo
Views: Read by 25 people
Date: June 29th, 2009
Website: www.SHTFplan.com

Copyright Information: Copyright SHTFplan and Mac Slavo. This content may be freely reproduced in full or in part in digital form with full attribution to the author and a link to www.shtfplan.com. Please contact us for permission to reproduce this content in other media formats.

Start the discussion and leave a comment...

The Prepper's Cookbook: 300 Recipes to Turn Your Emergency Food into Nutritious, Delicious, Life-Saving Meals (Ad)

The Ultimate Preparedness Library (Ad)

Will The Government Seize Your Food? (Ad)

Name

Mail (Not Required)

Your Website or Blog (Not Required)

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Commenting Policy:

Some comments on this web site are automatically moderated through our Spam protection systems. Please be patient if your comment isn't immediately available. We're not trying to censor you, the system just wants to make sure you're not a robot posting random spam.

This web site thrives because of its community. As such, we have implemented a comment rating system controlled by our users. The thumbs up or down flagging system will allow readers to determine if the post is or is not relevant to the conversation. User comments that are flagged with a thumbs down too many times in relation to thumbs up votes will be hidden from view (but still available for reading). While we support lively debates and understand that people get excited, frustrated or angry at times, we ask that the conversation remain civil if at all possible.

Does the Price of Gold Rise or Fall in a Deflation?

Leave a Reply