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August 7, 2019 | Golds Blasts Through $1500: Message? Central Banks Out of Control, Not Inflation

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Gold blasted through the $1500 level today. Let’s analyze the message. Here’s a hint: The message isn’t inflation.

The above chart is and end-of-day chart from yesterday. Gold closed at $1484.

At 11:30 AM Central, gold was at $1520, up $36 on the day.

Gold vs Copper

What’s the Message?

Stephanie Pomboy at Macro Mavens nails it.

Gold Not an Inflation Hedge

As I have pointed out numerous times, and contrary to popular belief, gold is not an inflation hedge. Gold fell from $800 to $250 with inflation every step of the way.

Gold vs Faith in Central Banks

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Everything Under Control?

Clearly not, and I have easy-to-understand proof.

  1. Hello Treasury Bears: 10-Year Bond Yield Approaching Record Low Yield
  2. Negative Yield Debt Hits Record $15 Trillion, Up $1 Trillion in 2 Business Days
  3. US Treasury Declares China a Currency Manipulator Under Orders From Trump

If you believe gold tracks inflation or is some kind of inflation hedge, you need to think again.

Only in hyperinflation or its mild form, stagflation, is gold an inflation hedge. But even then, both are synonymous with central bank stress.

Hello Treasury Bears

Let me make it simple: It’s the debt, stupid!

The global economy is chocking on debt as central banks are determined to have more of it.

Inflation? Forget about it. The bubbles are proof we “had” inflation.

The Bond markets says something else is coming up.

Mike “Mish” Shedlock

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August 7th, 2019

Posted In: Mish Talk

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