Fed has been able to keep rates low on the basis that inflation has been controlled, and since the end of QE2 around July 2011, commodity prices have STOPPED increasing.

(click to enlarge)

ECB-Draghi OMT and USA Drought provided some rally at point C.

QE3 came in with a ''pinch of salt'' (Fear of Elections & Fiscal Cliff) which cappedthe hedge funds and smart money from initiating 'ALL OUT RISK ON'. And the Fear itself caused CCI to pullback a bit post QE3 as shown by line D.

Its Making a Clear H&S Bottom (marked by GREEN), which it will take out once it advances above the Green Resistance Trend Line. This will be Once smart money senses that both Fiscal Cliff is about to be CAN-KICKED and Debt Ceiling about to be Raised/Removed.

If inflation in commodities is clearly evident then global risk capital along with sovereign wealth (Chinese & Others) will scramble for inflation hedges, and will be very positive for Gold.

At that point, Fed will loose complete control of the Bond markets because keeping rates at zero will bring a hyper-inflationary depression, and raising rates will killthe recovery and push the economy into a deflationary depression.

I would like to show the above Banksters the below picture, and kindly excuse me for this. I will explain below why....

(click to enlarge)

Foreigners are no longer buying US Treasuries and the Privately Held Federal Reserve is printing and lending the money to the US Government. Foreigners are dumping dollar reserves and buying-hoarding commodities and resources, creating a lot of inflation. (read my earlier post: if ben allows interest rates to rise).

A recovery is not possible unless inflation reduces the burden on disposable incomes so that people consume and spend on other things.

If Inflation keeps rising, then disposable income will fall further and the masses will not be able to support conspicuous consumption which can bring about economic recovery.

Also people are now afraid to borrow and spend, as they very well remember the forecolosures and evictions and the joblessness post the 2008 Subprime debacle. Banks are also not lending as they have strict rules regarding creditworthiness!

Once again, if RECOVERY is not occuring, FED cannot increase Interest Rates ! and if Fed does not increase interest rates, Inflation will SCREW THE RECOVERY !

CATCH 22 !

Also how about all those entitlement (Social Security, Medicare, etc) payments maturing in the coming few years ? How will USA finance them ? MORE MONEY PRINTING ?

The world's money managers (RATS) are now worried, as to when the Global Economy will start to recover. Thus 'RISK ON' is not gaining traction no matter how much money is being thrown at the problems.

Commodities, Equities & Real Estate are unable to gather enough interest to propel them above previous highs. All are showing signs of a 'dead cat bounce'. Earnings are loosing luster and future earnings' guidance is barely acceptable. Thanks to the deflationary-stagflation.

In this environment, Money is being safely parked in the US Treasury markets. Huge amounts. Pressure is building up at the dam.

If none of their last resort economic policies (money printing) are going to work, then it will mean confidence in the issuer of fiat currency will soon fail. The only way they can keep this rocket from stalling and falling is via extreme money printing. And that too will never work !

Either the global money managers have not realized this fact already,

OR they are not being allowed to enter the true safe-haven shelter of 'GOLD'.

OR They are scared of that thought, as they know that there are Quadrillions of RATS in the room eyeing the small exit door to the safe-haven of GOLD. If they OPENLY stampede towards that door, chances are that hardly 1% will be able to get out safely! So their only option is to secretly advance towards that door, before the others realize. (Remember there is about 170,000 MT of GOLD above ground valued today at around 10 Trillion US$, against Quadrillions of Fiat Dollars inside the real & derivatives system).

Therefore US Treasuries/Bond markets will never signal this 'dam break' until the VERY LAST MOMENT. Thus it is futile to watch the bond markets for this signal. The Gold rocket will blast off within a few seconds of this event.

The gold paper price manipulators are under heavy attack as the 'SMART RATS ' are secretly leeching away whatever physical gold can be obtained without attracting attention!

These RATS know that GOLD IS SO DAMN CHEAP!

Disclosure: I am long [[GLD]]. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Past one year you all have been holding on to your Gold Bars & Coins and watching its price remain rangebound. QE3 provided a big relief and confirmation of political & economic checkmate.

But the BIG question is still,

''WHY THE HECK IS GOLD STILL RANGE BOUND WHEN SO MUCH MONEY IS BEING PRINTED VIA QE3'' ?

WHY WONT IT BREAK ABOVE $1791/Oz ?

After knowing so much about the economy and eurozone and fed, and equities, and viagra, and stuff, what is the reason GOLD is range bound and not able to breakout ?

The answer finally came in today through a very well respected gold analyst, Mr. Michael Pento. Just two lines were enough to clear the clouds. I quote him below....

Michael Pento : ''Once the debt ceiling is raised and fiscal cliff is resolved (with some diluted version of austerity), then money supply growth rates will continue to rise strongly and create another secular move higher in the aggregate level of prices.''

What it means is that Fiscal Cliff & Debt Ceiling are holding the 'RISK ON' trade from taking off, and until they are both CAN-KICKED (easily solved via raising the ceiling and bypassing the cliff-game with a cool Cheat Code) the velocity of money will not rise. But once it is solved, velocity is going tocatch fire, and Gold would be the best performing asset.

Its time to buy Physical Gold at dips. Before its clear to the masses that FISCAL-CLIFF will become a FISCAL-SLOPE !

Disclosure: I am long [[GLD]]. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am Long Physical Gold. Not ETF GLD. But since they don't have a symbol for Physical Gold, i used GLD in my disclosure above.

Disclosure: I am long [[GLD]].

Thus he is hiding the true inflation figures via the loophole in the cpi. Cpi doesn't report food & energy inflation. This is enabling him to tell the world that inflation is low (current official reported USA headline cpi around 2%). Shadowstats reports that true inflation is in the range of 8-9%.

(click to enlarge)

As an example, if Interest rates were to be raised form the current 0.25% to 6% then the yearly national debt service bill would touch 1 trillion. Assuming the national debt is around 16-17 trillion.

The yearly current account deficit is around 1.x trillion. Imagine if another 1 trillion (of above mentioned) debt service payment was added to this ? It would mean a complete destruction of credibility of the US Dollar and Hyperinflation would ensue. (Maybe it has already, as such 70% of US Treasuries are purchased by the FED alone, not foreigners).

If he doesn't hide the true inflation, and willingly discloses the truth, then he has to INCREASE INTEREST RATES and bring about a Deflationary DEPRESSION. Also we know that Deflation always ends in Hyperinflation as Confidence in the government & currency fails.

How long has Ben decided to hide the true inflation? Americans know that everything is getting more and more expensive. (Remember, there is no Glass Steagal-Volcker Rule restriction, so QE money is within banking system, and being used for speculation in commodity markets). Also China is aggravating inflation by secretly hedging its colossal US$ exposure, and has already hedged 50% of its reserves into Hard Assets (commodities, gold, resource based investments). In such a time of high inflation, who would park money in Extremely low yielding Treasury Bonds of USA?

If Ben keeps hiding this fact and lets rates remain low for longer, then inflation will explode into hyperinflation. It will become crystal clear to everyone that inflation has now become 'RUNAWAY', and the masses will start hoarding essentials so as to maintain purchasing power of their money. They will detest cash. Velocity of money will skyrocket!

Its a matter of how long he can keep things in stalemate, as the real inflation time-bomb is soon going to explode.

Will he choose Hyperinflation willingly or not, is the question in our minds !!

(click to enlarge)

Disclosure: I am long [[GLD]].

Additional disclosure: gld = physical gold. (not etf Gld)

Most of Western Food products have few raw materials from which they are made. Two of the main ingredients are CORN & SOY. Even the Meat is made from Cows & Chickens & Fish which are FED CORN MEAL !!

(click to enlarge)

To make CORN & SOY, fertilizers-pesticides (both are CRUDE OIL based products) are required. For detailed information watch the movie foodinc. More details at :

www.businessinsider.com/whats-in-our-foo...

&

www.takepart.com/foodinc

Now once you have seen the above movie, you will understand the power of CORN. Now let us look at the Chart of CORN to see whether we have had Inflation or not !

(click to enlarge)

Same with Soybeans :

(click to enlarge)

Crude Oil which is used for all the Fertilisers, Pesticides, Logistics, Distribution Has shot up form 40$ to 90$ per barrel.

Its the Banks, which are recipients of QE cash (to refill their losses) which gamble this cash on the commodity exchanges to jack up the prices of corn and soy and crude oil, which indirectly Brings MASSIVE INFLATION TO OUR LIFE !

Disclosure: I am long [[GLD]].