Metal sector unattractive despite Metals boom - Commodity Online

By Goldrunner with Lorimer Wilson
I am at a loss for words (something that rarely happens to me) as to why so many in the Precious Metals Sector have become so negative at this juncture in this Historic Precious Metals Bull Market. No doubt, many have “2008-itis”, thinking that the Dow is going to crash. Of course, that has been the daily mantra since the top in 2000, hasn’t it?

So says Goldrunner in his latest article just posted on his brand new site going on to say: There is no doubt that the economy continues to deteriorate, and there is no doubt that the type of program of Dollar Inflation in place, debt monetization, will do little to directly help the economy. The program of Dollar Inflation through US Debt monetization, however, keeps rates unreasonably low (negative real rates), and it also creates an inflationary pricing environment. It is difficult for the price of things with intrinsic value to fall in “price” with such a massive Dollar Inflation program underway.

The Intrinsic Value of Gold and Silver is on the Rise
When it comes to things with intrinsic value, Gold and Silver have sat at the top rung on the valuation ladder for thousands of years and the Gold and Silver mining companies have produced the Gold and Silver as well as holding huge reserves in the ground.

Have you shopped for groceries, lately? Do you pay any bills? Have you looked at the price of the various commodities, lately? Things with intrinsic value are seeing sharp increases in price, and these price rises are all a function of the massive Dollar Inflation underway. The deflationists who held their tunnel vision on the deteriorating state of the economy back in late 2008 and into 2009 (and still do to a large extent) said it couldn’t happen. They said that we could not see an inflationary price environment going forward because the Federal Reserve Multiplier System via loans from banks was dead in the water. Well, the FRB multiplier system is not creating the price rises, today. The sharply rising price environment is purely compliments of the massive Dollar inflation via debt monetization.

The Value of the US Dollar is Falling
As the Dollar Inflation continues, the “Value of the US Dollar” falls. As I showed several years ago in anticipation of today, you will not see the extent of the fall in value of the US Dollar via the Dollar Index because that index is a false “pricing system” for the Dollar- one created to protect the US Dollar during times when it is being aggressively printed/ inflated/ devalued. Once global competitive currency devaluations are in play (like today) you will only see the true extent of the fall in value of the US Dollar by looking at the chart of Gold in Dollars. $Gold is around all-time highs, and it will go higher as the Dollar Inflation program continues.

How can the Dollar Inflation programs be abandoned, today? Governments, corporations, and individuals are all underwater since they never bothered to fund their obligations for the future. The only choice that the Fed has at this time is to continue to print and to devalue the US Dollar in an effort to devalue debt and unfunded entitlements that are basically “fixed” in price by contract. As things of value rise via price inflation, the constantly priced debt and entitlements will effectively be devalued against them.

The Gold Parabola Continues to Angle Higher
Sure we will see corrections as the Gold parabola angles higher, but as a parabola grows the up-moves get longer in amplitude while the corrections get shorter in duration. I like to follow the late 70’s Gold Parabola as a comparison to where we are in the Gold Bull, today. At this point in the late 70’s Gold, Silver, and the Precious Metals Stocks exploded higher before reaching an intermediate-term top. The late moves in an up-cycle are almost always the biggest moves in the cycle for the Gold and Silver Sectors. Sure a correction is coming, but I believe that the coming intermediate-term correction is still months off; and I believe that the correction from that higher point will not retrace back down to where we are today.