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Friday, September 04, 2009

The inflation has been postponed

We are enjoying our month in the country. Not exactly a vacation…but close. We work in the office from 8AM until lunchtime at about 2PM. Then, we turn our attention to other things. In the summer, that means painting. We’re repainting the billiard room, because Elizabeth decided that the curtains needed to be changed. And then, we’re repainting a farmhouse, top to bottom, before renting it out.

Painting is a fairly relaxing occupation. You can do it while thinking about other things. Rolling the walls or cutting in the corners, some men might think of going hunting…or playing golf. We try to figure out what is going on in the world economy. For these are remarkable times we live in. We see what is happening…pretty much what we expected. But we’re not sure where it leads.

Readers may have noticed a shift in our thinking recently. Well, you can blame latex. As we were painting in the billiard room we began to see that governments are more incompetent than even we had realized. They can’t create inflation on demand. A few months ago, we were preparing for inflation…even hyperinflation. Now…we’re not so sure. The depression and the Chinese vigilantes may hold off inflation…even for years.

Does this mean you should sell your gold? Well…we wouldn’t go that far. Even in the Great Depression gold and gold mining stocks rose in price. And the one and only sure thing is that the world monetary system is dangerously unstable. We’d hold gold until it settles down. Just don’t count on getting rich from it in the short-term.
--from "No More Giveaways; No More Recovery" by Bill Bonner

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