curious cat

Gold, Silver During Deflation: Sell the Metals Short

"it was the best of times. it was the worst of times."

looks like the author stands alone and everyone else is betting on fear, runaway inflation, uncontrolled qe, falling dollars and other currencies, etc. when the teeter appears to be tottering because everyone has already taken a position, you might be on the wrong side of the fulcrum. by buying gold and silver at this juncture, you are anticipating the effects of qe, but qe has not even dribbled into the economy, yet.

oil has run up on the goldman sachs call for $85 target, but weren't they the ones previously urging you to buy at $150. how did they make money on that one? (could it be that they took the other side as they touted the upside potential? very suspicious.) the world is awash in oil, natural gas and everything else. demand has fallen and it can't get up. we are saving more, spending less. in case you haven't noticed, they are paying people to buy things, now. that's a sign of a buyers market.

talking heads have been recommending portfolio insurance for some time, now. everyone is holding newly created gold and silver etfs. when only hysteria can drive the kind of demand you are expecting, you have to ask yourself: is this a time at which the government appears to be at a loss for a solution or a time when they are firing on all cylinders? is political currency still of value or is it spent? i'm not asking if they can time the escape perfectly. i'm asking if they know where the escape hatch is.

housing prices are way down. commercial real estate is dead in the water, overbuilt and about to go the way of all square footage. the kind of mini-celebrations the markets are currently experiencing are somewhat akin to the mild euphoria one would feel,... just before drowning. deflation and inflation can exist at the same time. it's like parallel universes existing in the same space.

those people who focus on whether deflation or inflation is the bigger threat are missing the big picture. the threats are now known quantities.