Thinks the inflationist gold bug: Why, I pitch gold miners and gold and silver and oil and tin and copper and hogs and… inflation! Buy resources!! Buy whatever will go up upon the “death of the dollar”!!!
So why then are the gold miners doing this while inflation expectations do that? Come to think of it, why have the miners been rising generally as the US dollar has risen since September?
Well, it’s simple. The miners are also-rans during cyclical inflation (check the period from mid-2016 until September of last year). I ask you to look at the whole cast of inflationist promoters one day when the sector is undeniably bullish (and everybody knows it) and remember who touted “inflation” non-stop since 2016 as a reason to buy gold miners. Because one day everybody is going to look smart, even the squirrels finally finding their nuts.
The gold miners – in their healthiest scenario – lead when things are falling apart from a cyclical inflationary standpoint. It doesn’t mean they are not leading to a new inflation trade, but in their best case they tend to be first movers, amid declining inflation signals.
Separately, I wonder how many supposed gold bugs are sitting there FOMO’ing at the mouth for having been bearish since October due to decelerating inflation signals.
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