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<p>[QUOTE="vpr, post: 2017450, member: 41554"]This is a common misconception. Inflation has nothing to do with the price of PMs. Absolutely nothing. What matters is the real rate of return on risk free assets (bank account, treasuries). If interest rates are below the rate of inflation, generally PM prices will go up because people move money away from risk free assets into something that can preserve the purchasing power of their money.</p><p><br /></p><p>Inflation inevitably will go up. But, how much higher can rates go? The government won't be able to service it's debt, if rates are say 10%. We know that inflation has the potential to go up to 6-7%, if not higher. I think the Fed will be pressured into keeping rates lower than inflation and this will cause PM prices to go up. At the same time, if stocks go down, everyone will want to pile into gold and silver.[/QUOTE]</p><p><br /></p>
[QUOTE="vpr, post: 2017450, member: 41554"]This is a common misconception. Inflation has nothing to do with the price of PMs. Absolutely nothing. What matters is the real rate of return on risk free assets (bank account, treasuries). If interest rates are below the rate of inflation, generally PM prices will go up because people move money away from risk free assets into something that can preserve the purchasing power of their money. Inflation inevitably will go up. But, how much higher can rates go? The government won't be able to service it's debt, if rates are say 10%. We know that inflation has the potential to go up to 6-7%, if not higher. I think the Fed will be pressured into keeping rates lower than inflation and this will cause PM prices to go up. At the same time, if stocks go down, everyone will want to pile into gold and silver.[/QUOTE]
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