Gold tops $450
Now I don't myself read that much into the movements of the gold price whose movements often are unrelated to monetary factors, but so-called supply-siders have often claimed to view gold together with other commodity prices as the only important gauge when determining whether there is inflation or deflation and when the gold price in 1999 fell as low as $250 this was taken as evidence of "deflation".
But now that gold prices are rising they are strangely not viewing this as inflation. Interestingly Larry Kudlow in his October 20 2003 NRO column wrote that "Had gold moved up to $425 or $450 it might have triggered high-interest-rate inflation expectations.". Now that gold prices are over $450, gold prices as a indicator of inflation have been thrown into the memory hole. He interestingly have also shifted focus from the CRB Futures Index which he used to focues on and which includes oil and gold to the CRB Spot Index which excludes oil and gold and also has in other aspects a different composition. Is it a mere coincidence that he decided to shift gauge at a time when the two indexes diverged strongly, with his old gauge increasing 20% and his new gauge being unchanged?