Gold Briefly Breaks $1,170 / oz.
The quote right now is $1169.90, but the headline on CNBC said gold had broken $1,170 / oz.
Incidentally, can the Mishites (followers of Mish) explain why other commodities are doing pretty well too? I.e. my very crude understanding is that Mish is saying something like, “Our economy runs on credit. There is a huge debt overhang that needs to be worked off before you’ll see prices rise. The one exception is gold, which is money, and everybody flocks to it in times of crisis. Only with my analysis could you have gotten everything right: falling prices (except gold) and falling interest rates.”
OK, and the Murphy hypothesis (in equally crude terms) is: “Yeah we had (price) deflation until December. Since then we’ve had price inflation. It’s true banks create money by advancing new loans, and those loans are way down. However, Bernanke has made sure to offset this force by holding M1 and M2 constant. We haven’t seen massive price inflation yet because the banks are sitting on reserves, but we do see the dam beginning to break with the price of commodities, especially gold. Why did this huge wave of deflationary pressure stop on a dime in December 2008? Consumers have been paying down credit cards etc. since then.”
I’m not being sarcastic, I would really like to know if Mish somewhere predicted back in late December that oil would more than double in price over the next 11 months. Did he?
