So we have inflation and it is more than the Fed's original characterization of "transitory".   Indeed they have stopped using the word.  Inflation hawks, who have incorrectly been screaming the sky is falling for 40 years are having their day in the sun. I used to be one of them for about 20 years before throwing in the towel.  The conventional thinking went and continues to go something like this:  Irresponsible over spending by the government results in too many dollars chasing to few goods which MUST result in inflation.  It is certainly logical and could very well be the case today.  Trillions for relief still makes my mouth and eyes widen.  But an article in this week's Barons claims otherwise.  I've been a subscriber to this excellent conservative news/business source for most of my adult life.  

https://www.barrons.com/articles/inflation-recession-bond-yields-51643997182?mod=Searchresults

In case you can't get past the fire wall I will give my summary:

The debt, both public and private, that has grown and continues to grow doesn't lead to inflation.  It leads to slower and slower growth.  The trend of slower growth goes back at least 150 years according to the article.  Slower growth leads to lower interest rates and lower inflation.  (Certainly true since the 1980's).  The prediction of lower interest rates is certainly a contrarian one.  I have a bias toward contrarian viewpoints.

Still, I have an open mind on inflation.  In the back of my mind I have an image of all the spending as dry straw in waiting all these years and we are currently witnessing the fire, at last, being lit.  And once lit... perhaps it gets out of control.  And if THAT scenario is correct then we are in a lot of trouble.

The bull market in gold over the 2011-2020 period has been fueled by ZIRP (Fed Zero Interest Rate Policy).

Not inflation.  The thinking goes, if you can't get any interest return on your money you might as well have it in gold.

Of late the inflation numbers have have popped and gold has not responded which would normally be bearish action.

What I am watching is the gold action as the Fed ratchets up interest rates this year.  Gold should go down as interest rates go up.  If gold holds sideways (or drifts higher) I will look to get long.  Possibly call options as implied volatility is getting cheaper as the market goes sideways.  

Thoughts ?