LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
It’s 2007 All Over Again



-- Posted Tuesday, 13 April 2010 | | Source: GoldSeek.com

By: Toby Connor

Several weeks ago I speculated that we were “On the Brink of an Asset Explosion . So far events are unfolding about as expected.  I might even say they are moving more aggressively than I thought.  Well actually, there’s no doubt this cyclical bull is unfolding much more aggressively than anyone expected.

Compare the angle of assent of this cyclical bull to the last one.

It’s readily apparent what affect the trillions and trillions of dollars central banks have pumped into the system is having.  I think Ben has clearly proved his point that in a purely fiat monetary system deflation is a choice, not an inevitability.

As long as a country is willing to sacrifice its currency there is no amount of deflationary pressure that can’t be printed away.

However, no amount of printing can erase the underlying problems.  And those problems are going to persist until they are cleansed from the system.  In his mad attempt to avoid the mistakes of the depression Bernanke is going to create a whole new type depression.  This time the depression will materialize as a hyper-inflationary storm.

What the powers that be fail to understand is that we are going to suffer a depression that is unavoidable when a credit bubble forms and pops. All we are doing is choosing the form of the depression. In this case the memory of the deflationary depression in the 30’s has sent us down the other track into the beginnings of a hyperinflationary state.

Going back to our charts you can see that the February correction separated the second leg of the bull from the third and almost exactly matched the `04 correction in magnitude if not in time.  Remember everything is unfolding faster this time.

I think we have by passed the middle years (2004-2006) of a normal bull market and have now entered the final stages of this cyclical bull. I tend to think we are now in the same state as the runaway move in late 2006 and early 2007.

I don’t really expect this stage to last as long as it did during the last bull though. Everything else is unfolding much faster I don’t know why this stage won’t either. Ultimately these extreme momentum moves usually fail dramatically with a violent correction that gives back several weeks or months worth of gains in just a handful of days.  I’m expecting some kind of mini-crash (4-6%) at some point during earnings season.

Once that correction has run its course we should enter the final parabolic stage of the bull. That’s when I expect we will really see asset prices explode higher.

The first two legs of this bull gained 300 and 275 points respectively.  I wouldn’t be surprised if the last leg gains another 300+ points before the whole house of cards comes crashing back down.

And what is going to bring it down?  The same thing that destroyed the economy in 2008 …oil!

Without exception, every time oil spikes 100% or more within a short period of time (one year or less) it has eventually led to a recession. Well Bernanke’s insane monetary policy has virtually guaranteed that will play out again as oil has now risen over 140% since this cyclical bull began.

Amazingly enough oil has done this in a very low demand/high supply environment.  This fact could only be true if the cause for oil’s rise in price is directly attributed to the Fed’s monetary policy.

Once the market corrects I think we can back up the truck in virtually any asset class for the final parabolic move as the Fed completely loses control of money supply.  We just need to keep in mind this will be an end game not the beginning of a new secular bull.

Toby Connor

Gold Scents 

A financial blog with an emphasis on the secular gold bull market.


-- Posted Tuesday, 13 April 2010 | Digg This Article | Source: GoldSeek.com




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.