Gold Bear Or Bull? Mainstream Media Really Don’t Get It

The Wall Street Journal (WSJ) recently published two separate articles (on the same day) discussing the bull and bear arguments for gold. Probably it was no coincidence that they summed up exactly five reasons in favour of gold, and also five reasons as bear arguments. Without going into detail, we simply list the bull and bear reasons. Disclaimer: these are not OUR arguments, we simply copy them from the WSJ.

Bull arguments for gold

  • Fears are receding in peripheral Europe
  • Equities could tumble
  • India’s monsoon season won’t last forever
  • The important Indian demand for gold isn’t all about jewellery
  • Retail investors are still buying

Source: Five reasons why the gold bulls are right (WSJ.com)

Bear arguments for gold

  • The U.S. Federal Reserve could cut stimulus sooner rather than later
  • Investor sentiment is poor
  • The U.S. dollar is strong
  • Indian gold demand faces risks
  • Further ETF holdings could still be sold

Source: Five reasons why the gold bears are right (WSJ.com)

The elephant in the room missing?

While all these arguments are true and make sense (at least to some extent) it is so blatant how the single most important future driver for gold does not appear in the two  lists.

Today’s world is dominated by neverseen liquidity, monetary easing, and financial repression. The importance of those measures are clear in day-to-day life. What we know about monetary easing and stimulus:

  • It is one of the most important news items on all economic news channels.
  • It is widely accepted being the driver for the stock markets.
  • It was the genious plan which rescued the world from a disaster in 2008/9.

Yet the EFFECT of these measures (i.e. currency devaluations) are simply negated in the bull vs bear arguments. It is the single biggest threat to the 99% of the people which seems to remain unexposed. It is like the elephant in the room which is not seen.

Now the currency war is being debated publicly we would expect the media and analysts are taking it into account. Nothing seems further from the truth though.

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