So What's going on with Gold

So what's going on with Gold...
The main economic fundamental driving Gold higher is inflation, and the lack of it leads to a decline. There are two opposing camps justnow. Firstly there are the inflationists who argue that Gold should pop up to around $2360 and there are those with $10,000 in mind.

Bill Bonner sits in this camp, and his views are usually a good read:
http://dailyreckoning.com/keeping-the-genie-in-the-bottle/

They argue that the massive increase in money supply as a result ofthe various bailouts and Quantitive Easing, must result in inflationgoing forward. Indeed, they go further in saying that inflation isthe only way in which the massive sovereign and bank debt overhangcan be reduced is by inflating the worlds economies so the debt, asa proportion, becomes much smaller and so manageable.
There is also an opposite viewpoint from the deflationist camp.This group hold the view that for inflation to take off, increasingthe money supply alone doesn't let loose inflation. There has to bereal demand from businesses and consumers to chase prices higherand a willingness from employers to pay ever higher wages.
Just now the deflationists tell us that deflation is inevitable.Businesses are shedding staff, pensions cut, the feel good factorof ever higher house prices is all over and will not return for adecade or more.
Also, all the new QE money is just being sucked into bank balancesheets to counter all those dud property loans and not circulatingin the real economy where it just might have done some good.

For more on the deflation view read Robert Prechters views:http://www.elliottwave.com/club/20-questions-for-prechter/default.aspx?code=43274
So there we have it, two opposing views and one or the other will get the Gold price taking of again - one way or the other!

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China Slows

China has been the worlds Power House economy consuming oil, cement, agregates, steel and so on but there have been concerns that they have overdone it! It is said they now have sufficent power generation to come with demand for the next twenty years and have too many roads going to the wrong places.
This morning it's official with an expectated fall in the China Purchasing Managers Index and a fall in manufacturing output. Not unexpected as the US and European recessions are reducing demand for Chinese goods. Read the full article here.

Tradersclass Video

The morning breakfast kicked off in style again today and the video highlights two of the movers....

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