OK TDA,That deserves a serious reply. I think the average Joe...

OK TDA,

That deserves a serious reply. I think the average Joe Six Pack couldn't care less what Gold is doing. Gold can be a source of wealth. Gold can be a refuse in time of uncertainty. And, Gold can be used as a hedge against inflation.

There are also a very small, and I think, besotted group, who covert gold with all their foibles, pessimism and twisted paradigms. I refer this as being " baggage". Seems it hard to have a serious discussion about gold without the baggage, hence my parody post of gold going to $300.

My belief is that, no matter how much the European and American (+ others) increase the money supply, the willingness to take on risk, borrow money and invest, is nil.

The World is hoping that the consumers are going to get the cheap money, and start spending. It is not going to happen. We have had a huge kick in the guts, with falling assets, shares, home prices, and now layoffs. Australia will be looking at 9% unemployment. Just put yourself in that scenario for a moment. Are you going to go rushing off the Harvey Norman and pick up a new ipod and washer?

With interest rates at 1% in USA; 0.3% in Japan; Europe ? (The UK just cut 1.5% off their rate), there is very little extra stimulus the Central Banks can do. So now we wait.

Now, in my mythical pizza shop, if I still can't entice people to buy a couple of large Ham & Pineapples, I'm going to drop my prices. Thus, deflation is a possability.

No confidence = No demand. We've been clobbered.

Cheers, Skip