Negative Interest rates and precious metals- world view

coinkat

Negative interest rates make arrive in the US someday- perhaps sooner rather than later.

What do you think that does to precious metals?

This was posted here by mistake. So in an effort to keep this topical, would you consider modern bullion (mostly post 1986 to the present) or earlier issues, including Franklin Mint and earlier issues as the better play?

bidask

Originally posted by: coinkat
Negative interest reates make arrive in the US someday- perhaps sooner rather than later.

What do you think that does to precious metals?

Precious metals forum post ?

Zohar

I have been betting on global currency debasement leading to precious metal appreciation for quite some time. They tell us inflation is at 2% so I guess cheap credit doesn't impact inflation as economic theories predict. Truthfully, what has contained inflation expectation is very low global growth, and non existent wage growth which offsets any inflationary pressures as people have less to spend. Gold is treated as a commodity rather than a currency in the West. In the East, China, India and Russia buying the metal in significant quantities. Reduced mining activity (given reduced demand in recent years) has not expanded supply. Add to this, derivative paper gold (ETF) which acts in a somewhat detached manner to actual underlying physical gold in terms of supply and demand which can skew/manipulate performance.



I personally still believe that if you flood the money with historically cheap debt and sustain very low rates you will get metals to move up as a currency/inflation hedge. When they do decide to move, they move pretty quickly as they did on the way down.