Interesting Gold vs. Debt Trend Analysis

April 19, 2010
US Debt vs. Gold Price linear regression

The following uses data starting in 2001.

If we take the Obama administration estimates of $1 trillion dollar deficits for the foreseeable future, the model makes this prediction (with 95% confidence):

June 1, 2016: US debt = $19 trillion
price of gold (nominal) = 1849.42 (low), 2011.84 (best fit), 2174.27 (high)

The analysis does not end there though. Here's what happens if more data is included (back to 1971).

And this is what the updated model predicts (with 95% confidence):

June 1, 2016: US debt = $19 trillion
price of gold (nominal) = 780.95 (low), 1165.66 (best fit), 1549.94 (high)

That "best fit" would not bode well for gold investors who buy at the current price. Just something to think about.

I've added the blog to my blog list. I figure anyone who is willing to name a blog "Dollar Death $piral" and yet still show at least one risk in owning gold at these prices is worth further reading.

I might be biased though. I call myself Stagflationary Mark and yet I've been leaning deflationary for over a year. I still am. Go figure.