[fdr]

It's not very convincing, though: there's a huge runup in gold prices (as is often the case) between 2023 and the present, and a long do-nothing period before that (also often the case). The major consumers of gold are about: 50% jewelry, 10% industrial, 20% central banks, a large run-up from about 10% in the 2010s.

I like to think about the inherent contradictions of goldbugs going long on central bank portfolio policy: they both tend to distrust the central bank but in a way the central bank activities partially endorse their habits, and are the source of recent appreciation and thus accusations of "hidden" inflation. But central banks operate in an anarchic world system where they need something even independent of reserves held in other sovereign currencies, I presume most gold bugs are holding ETFs in an existing financial system (which is non-orthogonal: if you assume a financial system, why not avail yourself of the superior alternatives?) or have it in a safe in their house which has some other obvious problems.

I hold no gold, if I want hydraulic and non-volatile inflation compensation, it's quite simple: short-dated sovereign debt, aka the humble money market fund, which can be seen as the lower-fee version of the checking account. Nobody likes being a sucker, holding debt for below the time value of money, including changes in nominal value. It has immense price discovery pressure, and it finds its level nicely. If I were to hold gold, I would need some viable theory about how much I should hold to be de-correlated from other assets to be worthwhile. Maybe if I was exposed to jewelry costs and wanted to hedge them.

See https://www.jpmorgan.com/insights/markets-and-economy/market..., https://www.ecb.europa.eu/press/other-publications/ire/focus...

[jameslk]

When people talk about inflation, I don't think they're referring to just CPI, but asset inflation too. Things like equities, real estate, gold/silver/platinum, bitcoin, etc.

These have been outpacing CPI because they're levered by cheap debt, brought to you by central bank actions that keep rates low so governments can play the same levered games with their own runaway fiscal policies.

[fdr]

That's a lot of financial devices painted with a broad brush, and I think the charge that so may central banks are knuckled under with fiscal dominance is simply not sustainable. The ones that are, we tend to hear about.

Because there's a lot one could write about each of: equities, real estate, gold, silver, platinum (which have very different industrial exposures), and bitcoin, which have many price drivers.

So let's try something more parsimonious: what do you make of people, institutions, etc that bid on short and even long-dated sovereign debt around the globe, and come up the collective discovered price of, say...3.5%, annualized, for maturity in a month? https://www.treasurydirect.gov/auctions/announcements-data-r...