For those who think that India's demand for gold has been crimped by the government's war on cash. Here' the chart that shows India's gold import skyrocketed in February and that's excluding the black market which some say could even be more.
Meanwhile China continues to buy gold at a steady pace. Hong Kong is often touted as another entry point for gold passing into China.
Gold price has stabilised and no matter what the Fed says about raising interest rate, they are already behind the inflation curve. And that's is why gold will continue to shine because real interest rate after deducting inflation is negative.
Real interest rate will stay negative as long as the interest rate is behind the inflation curve.
The only way to get ahead of inflation is to raise the interest so high that it defeats inflation. But that comes with a price. With total US debt at US$68T and government debt of US$20T, such an environment will collapse the government, corporations and households.
So that is why I think the Fed will not raise rate aggressively because they can't afford to. Signs of stagflation are very real. Consider this. Q3 2016 GDP was 3.5%. Q4 2016 GDP was 2.1% and Atlanta GDP now puts it at 0.9%. But inflation is creeping up and has surpassed 2.0%.
So to boost the economy, the Fed will not raise rate aggressively and if economy goes into recession rest assured there will be a QE4.
Then what follows will be a hyperinlfation.
Meanwhile stay protected by acquiring physical gold and silver buying miners and related ETFs.
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