The Fed has finally chosen between runaway inflation and saving Wall Street insiders from the collapse of the housing, subprime and derivatives bubbles.
Inflation has been unleashed and given the slowing U.S. economy and the continued effects of the collapse of the housing & subprime lending bubbles – “stagflation” is now waiting in the wings.
This chart says it all:
The Gold Genie has broken out of Bernanke’s bottle!
Of particular note – Gold led the CRB index on this move and that tells me that this move will be based on a “gold is money” move – and not a broad based rally in all commodities.
For those “true believers” who saw all the positive currency signals that gold was transmitting over the last few months, and who used this recent correction from the shakeout of over-leveraged Yen-Carry Traders to load up on more gold, I say: Boo-Yah!
Gold is back!
Back leading all commodities.
Back as true and free money.
And back as the true and honest indicator of irresponsible monetary inflation by nearly all global central banks.
Hang on for the ride – this one’s just getting started!
And the best part of this move is that gold and silver stocks are still cheap. Gold has led this initial move and both physical silver and gold & silver stocks remain historically cheap to gold.
It’s time to load thy boat and hold on tight.
In my next post, I’ll review my favorite, individual gold and silver stock picks.
Michael Cerulean
1 response so far ↓
Patrick // September 12, 2007 at 3:35 pm
Bernanke did inherit Greenspan’s mess, but he isn’t making it any better. Real inflation has to be in double digits.
I heard on CNBC today that food has twice the impact on inflation as does energy – and food prices are soaring.
Everything from milk, to wheat has seen massive price increases.
Pat