Proof That Gold Is Unlikely A Deflation Hedge

Here is an anecdotal proof showing that gold isn’t a deflation hedge…

``Deflationary forces lie in the push factors that send a steady flow of people there to convert their gold-based valuables into cash, either through collateralized loans or outright sales. They are the victims of a moribund economy whose modest recovery from last year’s recession is failing to produce jobs or small business revenue growth.”

This from an article at the Wall Street Journal’s Blog which takes into the account the booming businesses of ‘New York’s Diamond District on West 47th Street between Fifth and Sixth avenues’ which serves as a battleground between inflation and deflation.

To rephrase, the battle is actually between market forces and government interventionism.