Gold Bubble about to Burst?

Kia Ora,

Well again the information coming from commentators is conflicting. Most I watch are in agreement that the markets are at the top of the dead cat bounce.

The US is tightening its spending, but still printing money, Japan is doing the same & China is starting to try & curb inflation as well as have a fall in sales due to everyone spending less.

So what is going to happen? The general commentator is saying the recovery is underway with the little correction. But the statistics don't back that up. What there was, was stimulus inspired, but now the truth is starting to be seen.

Whilst the commentators I am watching have being saying for a while everything was about to drop including gold. So that happened but is it the drop they were talking about or is that to come. It doesn't bode well for the year as January was down & that generally predicts the trend for the year.

One commentator is being quoted saying the Gold bubble is about to bust. True as the economies are tending to deflation, bonds & cash will benefit, but so much money has being pumped in to try & stimulate economies (Japan has being doing it for 20 years) & still is, but everything is starting still deflate, that at some point economies will turn & almost certainly hyperinflate.

Either way with things not so great, history shows that gold will win again. So it might drop for a while, but then it is likely to re value. Even better is silver at the moment.

The precious metals are predidcted to be only at the start of their bubble not the end & no matter what happens you will always get something in return for them.
It appears though that certain groups are manipulating again making people feel safe to start investing in areas
other than safe havens. Therefore they are transferring wealth & control to those who are doing the manipulating.

Control by having the politicians give more control to central banks in the guise of stopping this happening again, yet they are the ones responsible for it about to be so bad.

Is this a little correction or deflation?

Kia Ora,

It has being an interesting couple of days. First there is the heads of Britain's economy the Chancellor of the Exchequer & the Head of the Bank of England giving markedly different views on the US reforms. That includes the Head of the Bank of England being quoted as saying the opposite to what he said.

Then US housing sales are down as the stimulus runs out & 'Helicopter Ben' was reconfirmed as head of the Federal Reserve.

Now anyone with a conspiracy theory will be loving that. Just as virtually everything in the world is dropping (apart from Aussie house prices for now) they put back in the person who has vowed to throw money out of helicopters to stop deflation.

Now most are saying it is just a correction in the market & those happen.

But there are others who base their predictions more on history who are seeing this as possibly the beginning of the second part of the deflationary part of the depression. Then in steps Helicopter Ben to print (or quantitive ease) as much money as required to stop the slide.

But once it is in the system how do they stop it from becoming Hyperinflationary?

No one in history has being able to before. Each time man has tried to control this monster he created  it has got the better of him. It seems to be a natural force like gravity.

I wonder who will win this time?