Economists have had many market puzzles to ponder in this era of monetary excess, going back to Alan Greenspans long bond conundrum nearly a decade ago. The latest market conundrum is gold: why did it begin rallying on news that US liquidity growth would be slowing (the taper), and why has it remained strong despite weak global CPI prints and flagging broad money growth the world over. This is particularly hard to understand for Organization for Economic Co-operation and Development investors, who think of gold as an inflation hedge. But it is less counterintuitive for the emerging markets. To explain,...
http://www.zerohedge.com/news/2014-02-19/charles-gave-gold-%E2%80%98deflation%E2%80%99-hedge