THE GREATEST SHOW ON EARTH updateIII

Welcome to the game. Market is just dead this morning. But guess what isn't? Thats right........Fake out or break out. Guess we will just have to wait and see.

An interesting argument was made in why your longer term hold in gold and miners should be your best bet was made regarding golds performance if interest rates begin to rise. It essentially addresses that the interest rate rise will belie a more serious underlying problem of a world awash in print money that is reflective of an even larger reason to be in gold.

George Soros got it right recently when he said that gold was the ‘ultimate bubble’, that is to say the last asset class in the chain to become a bubble before the whole cycle starts again. For in past financial crises the clear pattern has been bank failures then a bond market crash and a rush into precious metals.

Will this be something that you and I see in the near future? I hope not.... I want to prepare better with more physical gold. Our concern here in the near term are stocks....ie the miners. So this scenario is hopefully at least two years away...I hope. If we are lucky it won't hit until after 2014.

Government intervention on a historic scale has mitigated the bank failures but led to an even greater issuance of government paper, and merely delayed the inevitable bond market crash that will come as – wait for it – interest rates go up.



Gold then becomes the final safe haven asset and the limited supply of gold means that its value will surge to unheard of levels. Dr Marc Faber recently suggested that $1,000 gold might be seen as similar to the Dow crossing 1,000 in 1982.

http://news.goldseek.com/PeterCooper/1268746723.php

UpdateI 1500.....Fed keeping rates unchanged...what I do find interesting is the miners appear along with gold to be breaking out on technical levels. Also within the Fed language was unit labor costs....note the language and the costs to miners...

Labor Costs

Officials may also be concerned about the falling cost of labor, said Marvin Goodfriend, a former research director at the Richmond Fed. Labor costs dropped at a 5.9 percent pace in the fourth quarter, according to a report earlier this month.

“Today we cannot say we’re past the period of risk of deflation in unit labor costs,” said Goodfriend, now a professor at Carnegie Mellon University’s Tepper School of Business in Pittsburgh.

UpdateII In a speech I recently gave at The Empire Club of Toronto , I referred to gold as the "anti-currency." Gold is not and never has been a currency. Gold is something entirely different and far more valuable. It is money.

"If you're holding paper currency, you have to have some kind of trust that the country that issued it is not just going to print its way out of its problems. That's a real concern right now. Gold, on the other hand, has real intrinsic value, unlike a paper currency which can be debased by its government."

– Sacha Tihanyi, currency strategist, Scotia Capital

http://news.goldseek.com/GoldSeek/1268756265.php

Update III Thanks Carol for Nenner link....

http://www.madhedgefundtrader.biz/Charles_Nenner_03_11_201.html