The Bull Case For Gold And Why It Is Totally Incorrect

The "inflation is everywhere" crowd is all wet. The inflation they speak of is a commodities bubble peaking and the world's central banks desperately trying to stave off a severe recession (fighting massive deflationary markets/factors) with rapid money supply growth.

The truth is that drastic deflation of assets (stocks worldwide, real estate, credit/debt instruments) and major deflationary factors (tight mortgage and retail credit lending, plummeting money market rates and bond yields) are everywhere.

Easy mortgage money and retail credit (autos, electronics, gas cards, credit cards, store cards, etc), combined with rock bottom interest rates, fueled a real estate boom from 2002 until early 2006, and, fueled a stock market/S & P 500 Cyclical Bull Market from October 2002 until October 11, 2007. The real estate boom and stock market Bull were obviously very inflationary. The current real estate bust/stock market Bear Market is very deflationary.

The easy credit years were very inflationary. What's occurring now is the diametric opposite situation, very tight money and drastically deflating assets (stocks worldwide, real estate, credit/debt instruments). It's an obviously very deflationary environment.

High commodities prices are obviously very deflationary to consumers/economies. Gas and grocery prices are pinching consumers, and, high energy costs are pinching businesses.

Cyclical Bear Markets occurring in a Secular Bull Market are corrections from a generational point of view. Gold and silver had two Cyclical Bear Markets in the previous Secular Bull Market that peaked in 1980, corresponding to Elliott Wave 2 and 4 downcycles/corrections, see http://tradethecycles.blogspot.com/2008/03/gold-and-silvers-two-cyclical-bear.html.

Have a goofy Mickey Mouse gold loon and/or scam artist explain why this time will be different and gold will defy gravity, especially in the face of massive deflation in stocks, credit/debt instruments, money market rates, real estate, tight mortgage/credit lending, etc

This is why the "bad news gold Bulls" are all wet right now, though I agree that a Secular generational Bull Market began in April 2001 for gold.

Gold probably entered a Wave 2 Cyclical Bear Market after the 3-17 cycle high at $1033.90, see http://stockcharts.com/charts/gallery.html?%24gold. Note the very large bearish spike on 3-17-08's candle.

A slightly lower or higher bearish double top cycle high might occur in a few weeks/months, but, gold has likely entered an 18 monthish Wave 2 Cyclical Bear Market, in which it should fall to $500-550, which is about where it's primary multi year Secular Bull Market uptrend line since April 2001 is.

To my knowledge I am the only one who is anticipating a protracted gold Bear Market now, which jives with the very deflationary worldwide economic/financial markets.

.......http://www.JoeFROCKS.com/ .