08 Sep 2009

$1000 Gold: "Was[n’t] the Spring, Then Spring Became the Summer / Who’d a Believed You’d Come Aloooong?"

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Gold broke $1000 this morning. I had previously confidently predicted (in the comments here) it would happen “by summer.” OK I was wrong about that, and the reason is that I foolishly thought the politicians would pressure the banks to lend out all those new reserves. (That was the whole justification for the bailouts, you may remember. It wasn’t about shoring up insolvent banks, it was about keeping credit flowing so businesses could make their payrolls–you know, the businesses that borrow money every month to pay their employees.)

Anyway I was off on my prediction, but I also want to remind everyone that my main antagonists in this keep talking of a giant deflationary credit collapse. I don’t have any specific predictions handy that I can point to, but these people would not have said back in January that gold would break $1000 again in 2009.

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