There’s an interesting debate today on Gold at Real Money. Some people actually think that Gold reflects future expectations for inflation
(sarcasm strictly intentional).
For those keeping track, I mentioned the GLD holders on Power lunch on March 30, 2005, (CNBC).
All this deficit spending may lead to higher rates, more inflation, and private capital crowded out, if left unchecked.
Not too worry too much: Max Sawicky figures out how to pay for everything, from Katrina to Iraq to all other deficit spending.
One last thought: As we noted in the past (here and here), the lack of increased supply in the 30 year Bond has sent managers after the 10 year. That, in my opinion, is a reason for part of the cinundrum.
When the 30 Year returns in February — we can expect to see that limited supply issue disappear — and that means rates ticking higher.