However, the markets are currently sending a different message.
Sure, there will be a sharp rally in the PM's relatively soon. However, with tip spreads plunging, PM's being slaughtered, EM's dropping sharply, industrial metals being rocked a deflation theme is playing out.
What does rising interest rates plus lower inflation projections spell? A robust world economy? Not exactly.
The world needs inflation to offset debt burdens around the globe. A major bout of inflation is badly needed.
I fear runaway inflation but It seems to me that the risk of deflation is rising and that's a major problem for all asset holders including the PM's.