Wednesday , 23 August 2017


Is This Surge In Gold a "Dead Cat Bounce" or a "Flight to Safety"?

What does [this surge in the price of gold] mean?…Is it just a proverbial “dead cat bounce” or is it that the death of the Euro is beginning to be priced into the markets….Will it continue? While no one can answer these questions with certainty my thoughts (guesses) are discussed below….Words: 380

So says ”Monty Pelerin” (a pseudonym derived from The Monty Pelerin Society) in edited excerpts from his original article* as posted at www.economicnoise.com.

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Pelerin goes on to say, in part:

What may be beginning is that gold is becoming the flight to safety. While the dollar may be strong against the Euro, both are deteriorating in purchasing power. At the moment, the dollar is depreciating slower than the Euro and hence appears “strong” relative to the Euro. All currencies are being destroyed or, as Voltaire observed, going to their intrinsic value — zero.

If (when?) markets finally recognize the inevitability of what massive money printing does to fiat currency, gold should soar. Whether we are at that point is unknown….[but] a significant [ongoing] divergence between the Dow and gold as seen yesterday will be [seen]as an early sign.

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When money leaves the banking system, stuffing it in a mattress is not a solution to protect against loss of purchasing power, especially in times when the currency itself is in question. Taking it out of the bank and putting it into hard assets should protect one against devaluations in currency.

As someone (name unknown) once said, people don’t invest in gold to make money, they invest in gold because they have money and are trying to protect what they have. They are trying to protect the purchasing power that they have achieved.

*http://www.economicnoise.com/2012/05/17/gold-and-the-dow-went-separate-ways-today/  (To access the above article please copy the URL and paste it into your browser.)

Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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