I'll Be Damned - Gold Loses its Luster

Pondering the latest market news - described below - I finallly came to the conclusion that the gold market is out of synchronization with the rest of the financial markets.

The only explanation that makes sense is massive selling of gold.

In the decades since Paul Volcker destroyed and bankrupted the Hunt Brothers when they attempted to corner the silver market back in the 70s and 80s, the world has changed.

No one thinks inflation is coming back, and that's what the gold market is telling us.

Inflation is deader today than ever before in human history.

No longer will a flood of bullion lead to inflation as its done for thousands of years.

Now that money is a pure fiat with government control, and now that money growth is published weekly, the monetary authorities will never again fool the markets about inflation.

So, what we're observing is the sale of gold.

That's it.

As soon as the markets realize this, we're off to the races again, with bond prices declining, and stock prices rising.

The only question is whether the Fed will now lower short-term rates.

STRATEGY
Be very careful here, and be prepared for the Fed to lower rates.