Definition: Reinflate

Reinflate - Re-Inflate: 

1. Term for fed policy  which attempts to fill deflated asset bubbles with easy money. 

2. Term made up by money managers who hope to keep you confident, and fully invested, so that they can keep up with the payments on their Mercedes Bends SL500 each month.   

There are several problems with the above hypothesis:

1. Easy money seldom ends up where it's needed/intended; often causing asset bubbles elsewhere, such as the housing bubble of '08. 

2. Rather than fostering an environment of accountability, easy money policy encourages more risk taking, on the part of investors. "After all, the fed will always just bail us out when we screw-up."

3. An inflate policy keeps cost of living prices high, while at the same time asset prices may be deflating, and wage growth is stagnant, placing an undue burden on the middle-class and the poor.    

 

The Top in Gold

Anyone who has followed this blog over the past year, knows my accuracy concerning Gold and the $USD has been spot on (pun intended).

I hate to be an "I told you so", but I have continually warned the gold bugs, "gold will not save you".

Once the entire herd - from Jim Cramer to Glen Beck - runs in one direction the outcome is predictable, and this bubble is set to implode just as the housing bubble did.

I predicted the top in gold just a couple weeks ago,

and now it can be confirmed on the 10 minute GLD chart.

GLD - 30 min Candlesticks:

via StockCharts.com

I've already covered my gold short, but I'll be putting if back on after one of many inevitable dead cat bounces.

As the anti-cramer, I recommend every trader put on a short position in gold, and leave it on indefinitely.

Everything is playing out just as I predicted over a year ago, including the end of the era of baby-boomer investment, assuring the stock market will not bounce back, the next time it crashes... and as deflation continues over coming decades, it comes down to simple supply and demand.... There's a long overdue worldwide depression underway, one in which there will be little demand for luxury metals like gold & Silver.

What is in short supply is $USD paying jobs, and low interest loans... and until the sheople wake up, and throw the deadbeats (those who keep spending money we don't have), and the Lobbyists (the banks and corporations including GE) who have enslaved us, out of Washington, things are only going to get worse for most of us.

As things get worse; the demand will turn to basic necessities like food, and shelter; farm land, garden seeds, fishing tackle, and dry Ammo will be worth far more than gold.

To trade future targets in gold and gold miners join 3Xtraders.com today

GLD - Weekly Candlesticks:

via StockCharts.com

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