Inflection Point For Gold?

My Feb. 25th remarks  stressed the need for a solid defense based on the current market environment. Today, let’s have some fun and talk offense.

We at RCM have carried the precious metals torch for quite some time. We have explained on countless occasions via this blog, via radio interviews and through one on one conversations, that prodigious fiat currency creation around the world will lead to one unassailably predictable outcome: Higher Gold and Silver prices.   

We have not wavered from our stance despite, at times, an overwhelming din that spews forth from the chorus of naysayers and neophytes. However, we are not so arrogant as to avoid the necessary and important process of challenging our own beliefs. We continue to question our own conviction by analyzing the behavior of Gold and Silver vs. the US$, Euro, GBP and other currencies.

The results of this analysis from the past two weeks are in and the prognosis remains bullish with an increased likelihood of  ’wildly’. We have often stated that the true inflection point for Gold will come when it rises in price vs. all currencies at the same time. Well, in true Shakespearean fashion,  I say to the Caesars of today, beware the Ides of March….

Gold Surges With DXY Positive For The Day

No, you are not reading that chart wrong. Gold just surged to near two month highs, hitting $1130/oz, or $12 higher, even as the dollar is green for the day. The fiat currency inferno is picking up, as traders refuse to keep their money in anything but gold or dollars – proof of tungsten gold counterfeiting is not helping the gold shorts. From the 2010 lows, the currency devaluation “safety trade” has been Gold and the USD, in a ratio of 5-1!

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Meet The New Regime: Gold And Dollar Coincident  

For all those who expect to see a strong dollar result in lower gold prices: our condolences. Gold is now as much a flight-to-safety target, as the the ra(p/b)idly devaluable dollar (and all other fiat currencies), as has been repeatedly observed on Zero Hedge. The chart below demonstrates that over the past three weeks, not only has dollar strength resulted in gold strength, it has resulted in gold strength at a 6X multiple.

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Another Record For Euro-Denominated Gold  

As the euro is plunging (and dollar by implication surging) with gold yet again flat and looking like it may turn positive for the day, gold denominated in euros just hit another all time record of €827.

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In ancient Rome the government clipped coins to devalue the currency.  Nero, in 64 CE, was the first to come up with the idea to actually debase coins by reducing their content. Today, currency debasement has become an art form as evidenced by the story below. For our society, will the outcome of such debasement mirror that of Rome?….

US Dollar Money Supply Is Underreported

March 1, 2010 – As the financial crisis has unfolded over the last two years, the Federal Reserve has been responding in a variety of unprecedented ways.  Therefore, it is logical to assume that these never-before-used actions have altered long-established ways of viewing things.  One area that has been impacted is the US dollar money supply.

The quantity of dollars in circulation is being underreported by relying upon the traditional and now outdated definitions used to calculate M1 and M2.  These ‘Ms’ are calculated and reported by the Federal Reserve based on the following guidelines that identify the several different forms of dollar currency used in commerce:

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About Bret Rosenthal

Interpreting the news that moves markets. Principal of RCM, LLC, and founding partner of the Fortune's Favor Family of Funds
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