k,
I'd like to say the miners lead, but that is no longer true, at least with respect to the uptrend.
Gold may not fall, and as I'm now more than 20% net short gold, that would be painful for me. But, that is the risk.
I do not know if they will do QE3 for certain, but Bernanke is a printer. It really is all he knows how to do. When the screams get loud enough, they will print. It might take a bit longer, as I'm sure they want to have enough ammo to get through the election cycle in Nov 2012.
As for the debt ceiling, I do not see how they cannot raise it. Both parties are just doing the politics thing and NONE have the will to make the choices that should be made. So, come August there will be a vote, probably with some token reductions, and in an instant can kicking will be given another year or so. It's pathetic really.
I believe we are already in something of a deflationary depression, but the massive increase in the money supply and the POMO juicing have distorted the perceptions of this. I try to be careful about direct observations from my little corner of the world, as the Detroit area has a truly unbelievable number of closed businesses and vacant office and industrial capacity. It is staggering really.
No matter what they do, America is in big trouble and someday can kicking will end. And that is when physical and paper will trade at completely different bids and asks. 2014 might be a good guess for the start of it. Who knows. All I know is at some point one must get long miners and hold physical for the true phase three of the bull and the ultimate endgame; which will be a reset and ugly beyond the wildest bears imagination.
The trick is to trade out of gold during that end game and buy real assets that are discounted. Real estate might actually be bottoming in a couple of years. Again, who knows.
GT
TH |
