Institutional Advisor Bob Hoye Explains Why Gold Miners are Winners During Deflation
In an interview with GoldMoney, institutional advisor Bob Hoye explains Why Gold Miners are Winners During Deflation
Market historian, geologist and Pivotal Events author Bob Hoye, talks to the GoldMoney Foundation's Dominic Frisby about the real price of gold in times of post-bubble deleveraging, and the opportunities in gold mining shares - which he thinks could be on the verge of a great new bull market.
I point out in advance that I do have a relationship with GoldMoney, and that I also own shares of miners as well as physical gold and silver at GoldMoney.
If anyone wants information about GoldMoney or investing in physical gold and silver in general, please Email Mish.
I have been in the same boat with Bob Hoye for as long as I can remember.
Mish Thoughts on Gold in Deflation
It is important to point out upfront what "deflation" means to me.
Deflation is not about rising prices, so please do not send me emails telling me about the price of gasoline or food (or anything else), especially if you are going to ignore trillions of dollars of debt and equity wiped off the books in the housing bust.
My definition of inflation is a net increase of money supply and credit, with credit marked to market. Deflation is a net decrease of money supply and credit, with credit marked to market.
We have been in generally deflationary times since 2007 along with the housing bust. Bernanke and central bankers in general have poured on the liquidity spigots fighting the collapse in credit, and as I expected (but other deflationists like Robert Prechter did not), gold advanced.
Here are some specific references to things I have written:
Dear Nouriel Roubini: The Fundamental Case for Gold Has Not Changed; To Understand, All Roubini Need Do is Look in a Mirror Dec 14, 2011 ... Reasons to Own Gold Have Not Changed The fact of the matter is gold does well in deflation. It also does well in times of credit stress.
How does one invest for inflation and deflation? Dec 27, 2007 ... Money is hoarded in deflation so gold should act well in deflation. Do not make the mistake of thinking that gold always does well. It does not.
So What's Behind Moves In Gold? Sep 2, 2009 ... One final point: Gold does well in "real" terms during deflations. It can do better in nominal terms at other times. "Real" means purchasing power
How Will China Handle The Yuan? Sep 1, 2009 ... And please don't think that gold does well in times of inflation and deflation because it doesn't. Proof is simple ...
Rear View Mirror Hyperinflation Dec 16, 2007 ... Money does well in deflation. Perhaps there is another big pullback first, perhaps not, but the hyperinflation argument for owning gold does not ...
Bizarro World Inflation; About that 2011 Hyperinflation Call ... Sep 22, 2011 ... It's not that I am in love with the dollar. Indeed I am not. I like gold. Historically, gold does well in periods of deflation and periods of credit stress.
Is The Inflation Scare Over Yet? Jun 26, 2008 ... Historically, there are times gold does well: Hyperinflationary times and Deflationary times. Gold does poorly under more normal conditions, ...
Myths About "What's Economically Important" Sep 17, 2010 ... Gold is money and as money it should do well in deflation in the country of the senior currency. It did. In credit-based system, especially where ...
Ten Pages of References about Gold in Deflation
The above links were from the first of 10 pages of articles searching my blog for the phrase gold does well in deflation.
The Google search mechanism on the upper right of my blog performs fabulously for things you are looking for. I use it all the time myself.