Decoupling from Gold Killed the USD in the '70s.
Classic Milton Friedman Clip
Gold Comment: The slight change in LBMA/COMEX EFP, the drainage of US gold recently, and the Shanghai premium expansion and contraction are related. We are 99% sure from 2 (unrelated) sources connecting dots. One very reliable. China is likely taking delivery of Stateside gold through a bank or bank-related intermediary.
It is quite possible the GLD shares inconsistency of availability to short as pointed out by Bob Coleman is related to the above observations… as in whoever (GLD bank ) is making shares unavailable for shorting is related to the Shanghai/Premium arbitrage trades and subsequent US drawdown.
Stay tuned.
Foreign sheiks don’t produce it, Oil imports don’t produce it. What produces [inflation] is too much government spending, and too much creation of money and nothing else
-Milton Friedman
TL;DR
(Bonus, Blackrock’s Weekly Commentary)
1- Inflationary Expectations Say This is Not Over By a Long Shot
Inflationary expectations are key to getting inflation under control once and for all
The 10 year inflationary average expectation is the most reliable indicator of these
Unless current inflation (gray line) gets back under those 10 year expectations (green line), consider inflation not dead at all.
That implies inflation must get below 2% to break the inflationary expectation cycle and negate the now rising 10 year average (green line)
2- Decoupling from Gold Murdered the USD, Not Oil
The “real” price of oil in 1975 right before the next spike in inflation,was almost the same as it was in 1971
Oil prices rose in free(r) market response to the realization that there were just too many dollars floating around post untethering to gold in 1971
