With inflation surging, QE headed to the scrapyard (for now), and imminent rate hikes taking the main market's stage, gold looks solid… and feels solid too.  

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US stock market chart

The technical action is concerning, and it’s in sync with the meltdown in market fundamentals.

The QQQ ETF needs to rally above $410 to void this ugly H&S top formation. With “Admiral Omicron” making a dramatic entrance onto the stage, that’s going to be a very difficult task. 

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monthly chart for the Dow

Thirteen years ago, I was an outrageously aggressive buyer of the Dow at the 2008 lows, and I’ve been an aggressive seller of my long-term holdings into the current highs.

The bottom line: The QE welfare program for US stock market socialists was launched in 2008, and now it’s ending. Deflation reached its “momentum zenith” in 2008, and a long era of inflation is set to dominate the next phase of the American empire.

Fiat worshippers believe the words of their constitution, rather than gold money, can save their empire, but fiat is a form of debt, and an empire of debt, by definition, is doomed to fail.

The stock market investors believe the Fed will reverse course on the next stock market decline, restart QE, and push the market higher.

In contrast, I’ll suggest that the more things change, the more they… change. Official CPI is almost 7%, PPI is near 10%, and unofficial inflation numbers are much higher. 

Going forward into 2022, stock market investors are likely to find that Jay Powell is nowhere near as accommodating during stock market declines as he has been in the past.

Here’s a recent picture of Jay. Investors need to consider the possibility that Jay will now act more as a stock market wrecking ball than a soup kitchen, and they need to consider that possibility immediately.

The mainstream market pundits seem to be suffering from a serious loss of sanity. They promised Omicron would create a huge “Santa Claus” rally in the stock market. What I see so far looks more like Santa Claws, and he’s pushing a sleigh full of lazy investors towards a very big cliff. This can’t end very well.

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The inverse H&S bull continuation pattern on this long-term gold chart is arguably the most aesthetic chart pattern in the history of markets.

While the Western fear trade gets most of the press, most of what happens in gold price discovery is related to commercial LBMA and COMEX traders responding to Asian physical market demand.

Clearly, what is happening in the Asian physical market right now, especially India, is incredibly positive.

For the “big fear trade parabola” in the metals market that is every gold bug’s biggest dream, a situation needs to arise where the Fed is raising rates, and its rate hikes fail to tame inflation.  

Money managers will pour out of the stock market and into the miners when this happens. Those hikes have yet to happen… so investor patience is required. 

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shipping ETF BDRY chart

Inflation enthusiasts have done well following my lead with this investment, and I think another significant opportunity may be at hand!

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weekly silver chart

While a dip to the $19 area is possible, silver should perform well (perhaps better than gold) against fiat as it becomes clear that the waves of inflation are getting bigger… 

And harder to tame.

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JNUG looks particularly enticing right here.

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GOAU daily chart

The $20 sell-zone has come and gone.  

The time is now, for investors to consider posturing themselves for a long-term era of inflation. GOAU and its component stocks should do very well. Stoploss enthusiasts can use the $15.75 price area to exit if the rally goes awry, but what looks more likely is that these miners… are set to fly!