Dear Jim,

Indeed, all paper IS junk. As you are all too well aware, a simple look at the charts over the past few years shows that Gold is charging against every currency. The race to the bottom perpetuates all sorts of head fakes along the way. None of them impinge upon the simple fact that Gold is shaking them all out.

So the dollar rebounds a bit versus some other trash? – who cares? Everything, as far as I can see (fx/oil/agro/bonds) is falling versus Gold. To me, the central factor we are witnessing is a monetary phenomenon (not an oil shortage/a food shortage/a base metals shortage). Everything else is a reaction to that… which is why Gold keeps shining through.

Regards,
CIGA Pedro

Jim,

The time for an intermediate top in December is all wrong.

CIGA Eric

Click chart to enlarge

Jim,

Inflation expectations, as measured by the spread between TIP and nominal bonds, have been rising steadily since March 2009.

CIGA Eric

Click chart to enlarge

Dear Jim,

Regarding the price of gold:

You’re not completely alone. The time for an intermediate top is all wrong. As you know, that matters more than price.

CIGA Eric

Sad news from Kansas:

Is 70 years old.

Today, if Dorothy were to encounter people with no redeeming human qualities, no brains, no hearts, and no courage – she wouldn’t be in Oz…

She’d be in on Wall Street

Dear Jim,

This recent movement in gold is nothing but noise. I can’t believe how people get upset at this. I applaud you for your patience. The confidence I maintain in your target of $1650 is unwavering. It is a matter of time that gets shorter by the day. It is sad what you have given to people goes in one ear and out the other. Would you concur that nothing has gotten worse for gold fundamentally but that its bullish case gets stronger by the day as the Formula takes hold and government is helpless to stop it?

Best,
CIGA Bt

Dear BT,

The popular delusion and madness of the crowd has driven markets forever.

Two weeks ago you could hardly find a gold bear.

Gold traded at $1224.10 in the cash market. Central banks on both sides were shocked.

Those that wanted to buy felt lost, and those that wanted to print more paper felt challenged.

MOPE came in from all corners.

China, talking their market interest yelled, "Gold Bubble."

The classic MOPE was an article stating that since central banks had been buying gold, it has to be the top. That takes the cake in terms of whimsical imagination without historical precedent.

From a man that has seen what a gold top looks like, this is not it.

All of a sudden the black hats were chasing the gold hats. You should know how many times in the 70s, I watched as even the nearest and dearest went into totally disorganized retreat mode. I yelled charge, and looked behind me to see no one whatsoever.

It can get damn lonely out here. However, those that are right rarely have company.

How many times have we seen this in the gold market? What has it meant so far? It means nothing more now.

Gold is going through $1224 and $1278 on its way to $1650, which will occur on or before January 14th, 2011.

Armstrong disagrees, as he sees $5000 by June of 2011.

Alf’s prices are without time estimates.

Regards,
Jim