As human beings we try to intellectualize and get to the bottom of things. We seek to find meaning in everything. There must be a reason for what is happening at any given time.
Take for example the Dow’s stellar performance and gold’s lousy performance even as monetary policy has gone reckless on a global scale. This goes against everything that humans who deal with the financial markets think they know. But what if we are just getting back into symmetry?
The Dow, now negatively correlated to gold, is currently becoming distorted with a high proportion of dumb money aggregates while gold is left for dead by the dumb money (public, momentum speculators, etc.).
The inflation being promoted by our Dear (Monetary) Leader (DML) here in the US and similar DML’s in Europe and Japan is coming into the system. Inflation is always destructive in some way, whether by gradual and insidious rising prices or by inflated bubbles that pop and resolve into deflationary fallout.
Contrary to the new analytical cult I have seen cropping up out there about a grand new bull era in the USA, might we not consider that it is just US stocks’ turn to suck in the bid? Gold was still working off the excess and thus was not a viable play in the global casino. It was not yet ready and there sat the Dow, at the November lows in response to the anticipated Fiscal Cliff drama, just waiting for a knee jerk relief bid.
It got it and things are coming into symmetry once again. Gold is much healthier than it was in 2011 and the Dow is much more risky than it was in November. Biiwii.com