Is RSG Over Sold ?, page-158

Colin

The CBs have been printing like mad since 2008, but that has not yet had an inflationary effect, its lowered interest rates and made certain asset prices a lot more expensive then they would have been, especially equities and property. Japan has been fighting deflation for about 30 years, and its govt debt is massive. I think the rest of the developed world (in which I now include China) is just following the the Japanese attempted reflationary model, which has failed. This world also has a demographic headwind from an aging population. Interestingly the Japanese became an important exporter of gold to Hong Kong when the gold price was last at USD1700-1900/ounce (individual Japanese were selling off the gold their had previously accumulated).

I do not expect the USD POG to get as low as 1045, but I think it can easily fall under 1350. I do not know when that may happen. Gold may hold up at a reasonable level until after the US elections as the Fed keeps cutting interest rates to help Trump's election. In the past QE was not positive for gold - it helped equity prices. For that we need QE for the masses - which is fiscal stimulus I think.

I still have a considerable portion of my portfolio in goldies, but I am hoping for better prices (ie a bounce) or waiting for other event to occur before I sell. Its always good to have cash for the choices it provides as opportunities present.

loki