Gold is a crisis hedge. It works well in inflation or deflation.
Gold is a crisis hedge. It works well in inflation or deflation.
Oct 7 at 11:17pm
I have heard many arguments between Harry dent / Peter Schiff / Mike Maloney etc on how gold will perform in the next recession.
Harry dent still predicts 700$ per ounce of gold during next financial crisis.
I found this plot of correlation between (M2 money supply - Base Money) and gold interesting.
The reason why I chose M2 instead of M3/M1/MZM is because M2 represents the money of the regular people. All deposits less than 100,000$ are counted in M2. Base money doesn't revolve in the economy but it is contained in M2. So I subtracted it from M2.
Gold is exactly tracking inflation but if something bad happens in the economy, it overshoots.
Thanks for the explanation. The chart sums it up.
Congratulations @madhav! You have received a personal award!
Click on the badge to view your own Board of Honor on SteemitBoard.
Congratulations @madhav! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Do not miss the last post from @steemitboard:
Vote for @Steemitboard as a witness to get one more award and increased upvotes!