Stagflation wins. Will the MMT crowd tap out?
The last refuge of the Inflation Deniers (Ok I admit it. I love that derogatory term. It's so versatile. Everyone is a Denier of something.) was that gold prices were a reflection of speculation fueled by the ease of gold investing via ETF's. Gold prices, according to these repackaged Keynesians, were not high as a result of Federal Reserve counterfeiting... er... I mean, operations. It's "animal spirits," if you reduce the lingo of Modern Monetary Theory to its Keynesian roots.
Is There Any Evidence that GLD ETF Has Distorted the Price of Gold?
The answer is none. Zero. Zilch. Nada. In fact, the MMT crowd is starting to sound like conspiracy theorists. (You can almost write the rebuttal for them, can't you? It involves Glenn Beck and Doomsayers. Good God! They are so predictable.)
"if you take the dollar out of the equation, you just don't see anything weird going on with gold post-creation of the ETF, which you would expect if there were some new force creating a bubble in gold.
If anyone has any empirical evidence that the ETF has created a big distortion in the market -- rather than just conjecture -- we'd love to hear it." - Joe Wiesenthal, Business Insider
So the only shoe left to drop is Hedonic Regressions.
Commodities, the Producer Price Index, common sense, all point to higher prices year-over-year. Unemployment remains at least 9% (and probably double that.)
This is textbook stagflation.
David in Qatar