Stagflationary forces will need to intensify in order to fundamentally justify investments in gold* and gold stocks as anything unique or special in the macro backdrop. As a side note, both Gold and HUI are poised bullish on their big picture technicals.
If you're a gold investor, then you've likely read of the NSFR of Basel III, which are due to be implemented by the EU-based Banks at the end of this month. Well, here's something else to consider.
The “I” word is… inflation. If a serious inflation cycle is beginning, a lot is going to change for the fiat-oriented citizens of the United States, and not in a good way.
That the debt is unpayable may be obvious, but the endgame is not obvious at all. The Fed keeps printing, but no default. How come? Is a simple "reset" coming?
The weaponization of the US dollar to bring the rest of the world to heel is backfiring. Only a serious change in course – toward non-interventionism and non-aggression – can avert a disaster. Time is running out.
We have entered into a very treacherous market environment, which will likely last over the coming two months. And, I do not see the next multi-month trending market move setting up for several months.
The weightiest piece of evidence about Basel 3 is the astounding panicked protest issued a month ago by the LBMA and the WGC, a protest directed to the Bank of England's Prudential Regulation Authority, opposing implementation of Basel 3 in the UK.
The Fed is walking a thin tightrope between fighting off financial asset deflation (a stock and bond market crash). To do this it needs to continue printing enormous sums of money.
