"During 1979 the inflation rate in the US was on average 12%...

"During 1979 the inflation rate in the US was on average 12% while now is bellow 1.5%."

Firstly the premise for your argument is flawed, as the calculations used to determine inflation in the 1970s are significantly different to the calculations used today, so how about addressing that before getting fancy with economic theory.

You are comparing apples to oranges.

And I never said that stagflationary forces are the only reason to buy gold, just one of many.

Of course there are some differences between economic conditions in the 70s and now, but I don't think that making the observation of rising prices for goods in the US and poor growth/employment and calling it stagflation is an economic crime.

Lets simplify it.

Is there inflation in the US?

Wage inflation(NO except for CEOs and the elite)
Goods inflation(YES apart from electronics and some housing, there have been consistent increases in food, energy and equity prices)

Growth in the US is limited with almost 50 million people on food stamps and when including those on the poverty line, the number of people with limited purchasing power increases significantly.

There has been an improvement in minimum wage jobs, but that will not help the US which is largely a consumer based economy.

This is what is really happening on the ground in the US, millions can't get out of poverty, and it doesn't matter how low interest rates get if you don't have an income to utilise the opportunity.

The 2 main issues are structural and energy related.

1. US markets need to build a larger manufacturing base and this will take a weak USD and many years.

2. NO SIGNIFICANT GROWTH can occur with rising energy prices in real terms.

ALL historic growth in the developed nations has occurred with a backdrop of INEXPENSIVE ENERGY.

It will take at least 10-15yrs to transform the economies based on crude consumption into other fuels that can be utilised on a mass global scale, but I highly doubt that is even likely with the shifting power and instability that will occur once the middle east is not the energy provider for the world.

and finally...


"However now the model in use and so far with very great predicative power is not the Friedman-Phelps natural rate hyptotesis, but the Keynesian model of insufficient aggregate demand which tells that in a liquidity trap, the printing of large amounts of money is not INFLATIONARY"

Economics is not a perfect science at the best of times, let alone when so many economic liberties have been taken by central banks globally.

Good luck with the "very great predictive power"



Can we get back to comex holdings now??????