Akkam’s Razor

Gold is currently trading WELL above $500 per ounce.  While not historically high, the real value (adjusted) of gold has doubled in the last four-years.  Steve Forbes has previous commented that gold above ~$300-400 is an indicator that the Federal Reserve is not doing enough as far as interest rate hikes.  The Fed, however, is signaling that the most recent increase is the end of its measured progression of increases.  That’s especially curious, and is likely a signal by the Fed to motivate investors and “create” some momentum.  

Another opinion is that global investors have begun to lose confidence in our faith-based monetary system.  It will be interesting to see how Greenspan’s heir apparent, Ben Bernake, responds to this dilemma, especially in light of his academic study of the Great Depression, particularly the effect related to the demonetization of gold.

I’m not quite sure if the doom and gloom is warranted, as Economics was my third worse academic subject, trailing Statistics and Chemistry.  The standard pooh-poohing of analyzing the gold problem is that it’s being bought up for use as gold, meaning for semiconductors and jewelry.  This chart seems to contradict that theory.