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Wednesday, September 15, 2010

Gold makes new highs

USD is positioned to resume it's slide, or that gold is making new highs.

I'd rather the USD be gaining value than losing, but I don't set monetary policy.

In any event, Gold is positioned to rally hard core. If you do join in on the gold and/or gold miner bubble, be careful not to over-extend yourself. A bubble pops as quick as it comes. I doubt that the bubble is near popping, its just getting started.

And on Monday I said it was OK to stay out until a breakout occurred in gold and gold miners. Ding, its Tuesday, and here we are, breakout time.

A GREAT read on what may be going on is from Hussman funds. Mr. Hussman describes quantitative easing as the "cheating" of the system allowing rates to adjust to keep equilibrium in the system. And instead forces accelerated devaluation of the currency. Note, this does NOT mean collapse. Just a more rapid decline before appreciation can start to rebuild. I may post more on this later.

Two charts for your review.

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