Gold Is A Product of Debt, Not Business Activity

Jim is absolutely right, debt (and the confidence in the currency that denominates its) drives gold.

Currency devaluation, what the public recognizes as inflation, increases as the debt burden rises.

Debt Cones:


The greater the debt burden, the greater the adjustment in gold. These adjustments, devaluation steps in fiat valuation, influence the price of gold, silver, stocks, bonds, commodities, etc. The last two major devaluation steps in the U.S. dollar are revealed in the following chart:

Devaluation Steps: S&P 500 Total Market Return and Inverse price of Gold

Dear Friends:

Gold is a product of debt, not business activity.
If there was no business and no debt there would not be any interest
in gold.
If there was good business and no debt there would not be much
interest in gold.
If there is over the top Western world debt gold in either good or bad
business gold goes over the top.
If there is a problem with the reserve currency by default and over
Western world debt gold goes over the top, re-enters the monetary
system holding, and 80% of the gain.

Respectfully,
Jim

Source: jsmineset.com