ben davies - sell aussie dollar and buy gold, page-5

S8

I have to cast a vote for deflation.

Gold bugs like Ben Davies tend to have one explanation for all occasions - "inflation". (It's like a broken clock, the theory is true at least twice a day!)

There is no demand inflation in any OEDC country at this point in time. Governments maybe printing money with their ears pinned back, but nobody is spending! Meanwhile, the structural (or supply constraint) inflation that has fed CPI numbers in 2011, is receding.

We are plummeting into a deflationary spiral.

Look at last night's price action - AUD (commodity currency) DOWN, Equities - DOWN, Gold - DOWN! (How did that happen?) The money is flowing into USDs the most inflated currency base in the OECD!

At the moment, the spending power of the USD is increasing.