'Gold hasn't changed, the price of gold has changed'; What the gold price reveals about the macro-economy - Axel Merk kitconews gold silver metals finance investing economics mining
- Tuesday, gold shaved $50 off its market value, falling to nearly $1,760. The 2 percent fall in price reveals that the"perception of the macro environment" has changed, and that"speculators" have sold some of their holdings, suggested Axel Merk, CIO and Founder of Merk Investments.
"The markets are telling us it's a mess out there," said Merk."We were faced with a major supply shock. And when you're faced with a major supply shock, policymakers make the wrong decisions." "Supply shocks are stagflationary," said Merk."They cause costs to go up, and growth to go down… Part of the problem is not just that [the government] wrote [stimulus] checks, but when we have excessive government debt, and people lose confidence that this is going back into balance, that affects consumer behavior as well."
Merk said that the correct reaction to inflation is"not to write a stimulus check, but to throttle down demand" and improve the supply-side. He proposed that increasing immigration, while removing domestic barriers to oil and nuclear production, would help ease inflation pressures, while increasing GDP.
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