March 24, 2011-- "There is only one certainty regarding paper money -- the longer you hold it, the less it will buy in terms of real goods or real money -- gold." Richard Russell.
A late day raid on price, again after Europe went home for dinner. It happened at roughly the same time as it did yesterday, but it really did not do so much, and actually failed rather badly in silver.
Next week should be interesting. I do not know what it is going to take to move gold over that neckline in the big inverse head and shoulders formation, or how long it might take. But I suspect strongly that when it does break out we will see another fast move higher, because so many in the markets are not positioned for it. After at least one serious 'gut check' on the longs, gold will most likely move fairly quickly to 1590.
Depending on what happens, I will not be surprised to see gold hitting $2,000 by year end. What concerns me is the potential for a deflationary event this year with another stock market collapse. This will not be a true deflation, but a liquidation panic, that will set up the next round of monetization and a further deterioration of the social fabric.
There is an obvious push from some of the developed countries to enlarge the wars in the Middle East and Asia, from Libya to Afghanistan. This is all about oil, and Keynesian militarism which is the last refuge of corruption in a failing empire.
