[please note I am using the ETFs for gold and silver, rather than the actual metal contracts for ‘real time’ charting reasons]
Gold is not buying the ECB’s claim that all its purchases of government bonds (what was considered the nuclear option) would be sterilized and hence not add to the money supply. In the much broader picture what gold is telling us is printing money is the only solution central bankers know… and politicians are good with it. This *will* be how the massive shortfalls in U.S. public pensions will be solved, just as “stimulus” has been a backdoor bailout to the states who for the most part are out of control in their own spending. And it *will* be the crutch waiting for Medicare. As it *will* be (not clearly stated) the crutch for Euro zone nations – many of which have no chance of growing out of their debt situations.
Silver (SLV) just breached January 2010 highs….
iShares Silver Trust (SLV)
Gold (GLD) on the other hand is on a serious breakout and has long since cleared highs of the year….
SPDR Gold Trust Shares (GLD)
As I do every so often let me show clearly how your purchasing power is being sapped away by our “solutions”. While the US stock market looks “great” in US dollars, when viewed in terms of gold the story is far less impressive. This is the difference between ‘nominal’ and ‘real’ return…. it is crucial to understand.
S&P 500/SPDR Gold Trust ($SPX:GLD)
Don’t be fooled by the ‘strength’ in the US dollar; since every major floating currency on earth (yen, euro, dollar, pound) now engages in the same stealth default measures it’s ‘strength’ is all relative.
Disclosure: Long Ultra Silver, Powershares DB Gold Double Long in fund; no personal position.