its risky to anticipate further qe, page-17

loki01,
absolutely agree there are many differences between then and now, but that is a common point of reference for a lot of gold bugs. so just pointing out the lack of correlation. The excess capacity in the economy, as opposed to the supply shocks of the 1970s is the main reason for the absence of high inflation today, and why it is very unlikely, no matter what the Fed does. I'm not sure how they would extract themselves from the situation if inflation did take off. In the 80s Volker's interest rate rises did cause unemployment to rise temporarily, but it was medicine that needed to be taken. Fiscal contraction would likely also be necessary at some point. Very unpopular of course, but at some point necessary.

IMO a repeat of the Japanese experience is a more likely outcome (i.e. stimulus being applied over a very long period with little effect on either inflation or growth). Would that be good for gold? I am still not quite sure what makes it tick at times, but suspect the emerging markets are a more important factor.