When the stock markets were heading down, down, down, the gold market was going up, up, up. We find that a bit odd. The bears apparently were driving the market down on fears that the stock world was heading into a full-blown recession—maybe worse.

That thinking would lead one to expect a deflationary period. And in deflations, the price of gold tends to fall, not rise. There were times during the Depression that the West's central banks were buying up gold to keep its market price from falling below the official price of $35 an ounce

The price of gold tends to rise when there are fears of inflation. Conceivably speculators who have been buying up gold have a doomsday outlook, in which desperate central bankers would inflate their money supplies to beat an economic depression, only to create dire inflation, as in pre-War Germany.

Do they really think conditions are that bad? Maybe they do.

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