Fractal Gold Projection of $3,500 into Mid-year Remains Intact!
Thursday, March 1st, 2012
Our description of the Gold tsunami wave to come this year as a result of the huge wave of Dollar Inflation initiated by the $600 Billion US Dollars sent to Europe back in December of 2011 is beginning to be noticed by the markets. This is a very important “point of recognition.”
The fundamentals for this wave in gold are as follows:
1. The massive world debt load demands that we either see a deflationary depression; or that we devalue the debt by devaluing the paper currencies. The politicians have chosen to dramatically devalue the paper currencies.
2. The Federal Reserve is the only Central Bank with the right to print to infinity, thus, US Dollar printing will remain the leader going forward.
3. Gold moves almost directly inverse to the value of the Dollar. Thus, the acceleration of Dollar Devaluation will drive the price of $Gold in its accelerating parabolic climb. (The USD Index has little to do with the “value of the Dollar” as we will soon show via “The Fractal Dollar” in a different writing.)
4. This current leg of Dollar Printing via in the $600 Billion Dollars sent to the European Central Bank in a swap arrangement back in December of 2011 is just the start of this wave with Dollar printing demands to increase the debt ceiling, to cover losses by Fannie and Freddie, to continue to pay extended unemployment insurance benefits, and so on. Yet, the “lowly sum” of $600 Billion of Dollar Printing via QE drove Gold up to the $1920 level, and that much kicked off this round.
5. Debt monetization via QE sends no new Dollars directly into the economy since the newly printed Dollars go directly from Uncle Sam’s hands to cover the item listed, above. Thus, these newly printed Dollars only “replace Dollars” that were never allotted for all of the above items and other responsibilities like the unfunded Social Security Funds and Federal Pensions. As such, the economy is not directly helped by the new Dollar printing. As the economy continues to deteriorate it demands an acceleration of new Dollars to be printed. It’s like a cat chasing its own tail.