The battle between the two ‘flations - inflation and deflation - is far from over says Adrian Ash in The Bullion Vault. Private investors fearing collateral damage might want to take cover. Gold bought near $800 an ounce might just provide some kind or armor…

Since the days of Alan Greenspan, the Fed has been so petrified of a slowdown it has practically killed the value and stability of the dollar, says Adrian Ash in Whiskey and Gunpowder.

But by keeping interest rates below the rate of inflation for three straight years starting in 2002, the Fed created a bubble in the housing market. That bubble has now popped, leaving in its wake a severe liquidity crisis.

Now big banks won’t lend without the backing of government bonds, and the Fed continues to inflate money supply. All good news for gold, says Adrian…

It’s hard to over-egg the importance of Indian jewelry demand in the physical gold market. Between 2000 and 2007, gold jewelry sold in India accounted for one ounce-in-nine sold worldwide. One ounce in every five wound up as an Indian import (its domestic mines produce less than six tons per year), ready to be hung off young brides as 24-carat dowries or worked into bracelets and necklaces for the international market.

For the ten years to last week the S&P 500 - widely considered the benchmark for U.S. stock performance - delivered less than zero gains, says Adrian Ash in Whiskey and Gunpowder. That’s even after accounting for dividends (good) as well as inflation (bad). Stocks won’t become a good income-paying asset class unless earnings rise sharply or inflation falls. Neither are likely in the short term…