Posted Dec 8, 2012 by Martin Armstrong
Perhaps the biggest lie or sales-pitch has been that gold is the hedge against inflation. The correlation between gold and inflation year over year is less than 0.5 and that goes back even when the CPI was real. On a month over month basis, the correlation is less than 0.15. Gold has never been some magical great hedge against inflation. It is solely the hedge against government and there is a significant difference. Gold is an insurance policy – not an investment when bought in physical form and kept near your socks. This is why people then have to create conspiracies to explain why they are dead wrong.
Under a gold standard, gold rises during DEFLATION and falls with INFLATION. When gold is a free market, the opposite trend emerges. This is about survival and making money. So stop the bullshit. It is what it is. What is the problem with that? We are simply in a period of economic collapse and that is when gold shines as INSURANCE.