"hope that rising asset prices will give the illusion of a booming economy"... "loading up on stocks despite the fact that equity valuations have become far removed from the underlying anemic fundamentals of the economy"... "equity prices seem to be still in a state of denial"... "If the U.S. attempts to raise rates while the developed world is printing money to keep rates low, the dollar will skyrocket against our major trading partners"... "A surging dollar will crush commodity, real estate and equity prices, as it causes the reporting earnings of U.S. based multi-national corporations to plunge." Well stated! "Investors should then use this upcoming correction in asset prices and cyclical period of deflation to position their portfolios in hedged positions that profit from an inexorable increase in the rate of inflation." QUESTION: Offer an example. I see liquidity as the primary issue/concern. Hedge against what current inflation? Declining growth spells stagflation. What works best in stagflation? Growth declines, potential inflation or outright deflation follows? Oil prices are trending down as are agriculture products. I see recession. No interest rate hikes. No inflation. I see Japan 1989. I see corporate buy-backs holding up these artificial U.S. markets. I see cable net-work propaganda. I see mom & pop sucked. What asset gains, when monetary policy is on the verge of slicing $650 Trillion in derivative product amongst banks or Nations? How many more Trillion exists in unmarketable debt securities? BlackRock's name is to sooth the investor? For how many months to unwind the Central Bank scrambled puzzle? When the FED or ECB retains BlackRock we know they have come short of solutions to their combined QE ponzie scheme. Thank goodness were able to profit from such schemes. You have future answers? Which assets to buy, when? Deflation or inflation? Stagflation? I believe you may have no answers, just as the FED has no real answers, just as BOJ as had no answers back 25 years ago. I beg to differ your intelligence. I hope you have an investment answer. I do not. My cash temporary positions are at risk too as to "freezing" of deposits. I trust no bank after Cypress or Bulgaria yet temporarily cash is a parking spot. When Japan corrected (crashed) beginning late December 1989, the U.S. markets surged after a brief 1991 recession. Is the current European recession just a blip to U.S. markets as was the Asian currency crisis and the Russian default of the 1990's? If you have investment solutions to the current crisis can you offer guidance to your "hedging" strategies? If we are unable to utilize hedging mechanisms outright in our retail portfolio's what may you recommend? I doubt the U.S. can or will raise rates anytime soon. The propaganda sucked bond money into equities. When that reverses, we're crunched, with Russian sanctions and declining EU GDP to boot. Ouch!

Corporate buy-back gifts, QE stimulus packages, such packages ending in 60 days in the U.S., have any material substance as to technical analysis? The U.S. news media calculated into technicals? Wedge break-out coming. Pick red or black for the Roulette spin. I pick black. A correction is over due and needed technically. Fundamental indicators, such as GDP and PMI's, support technical wedge to break down. Liquidity is the theme, in my opinion. Deflationary forces rule. Russian sanctions are creaming the EU community. If every American business broadcaster or U.S. investor researched the Balkan area near by as to location of Ukraine they may come to understand this territory war is not new. It's 8,500 years running. Google the Kingdom of Serbia and research the South Stream gas lines from Russia to Europe. Research the Banking crisis in Bulgaria where bank depositors since June are still "frozen". See where South Stream gas lines were to be constructed. See past the mom & pop local news. Technical charts have little merit, other than wedges, before geopolitical events. Scan those into technical charts. Technical charts provide one thing: momentum of direction. Wedges provide no direction. That's when fundamentals are equally important as to decipher breakout direction. If the Central Banks had any glue how to handle this crisis they would have been prepared rather than recently alarmed today that U.S. induced sanctions would further disintegrate their combined fiscal efforts since 2008. CHARTS? There are no chart answers to this monetary mess. SOLUTION: LOCK IN PROFITS.

Your article makes no mention of seasonality factors. Even the Dec 2001/January 2002 charts suggest traditional seasonality factors favor a December purchase of gold securities (rather than September). October earnings and November GDP figures stand to weigh deflationary forces at hand. October 2008 took gold down along with all else. Liquidity potentially rules come October after the blood bath of PMI's released today. Of course, more stimulus will be touted. The fact remains all four great powers are with stimulus measures already in action. I doubt further action occurs other than Press reassurances. We may be in a pickle. You have charts for pickles?

I don't see inflation in PMI numbers out of EU today, nor Japan, nor Brazil. Actually, of the 11 largest global economies by GDP values I see deflation indications in 9 of those countries. The meak inflation your article suggests is that of being temporary induced with QE purchases. Once QE winds down, in about 60 days, and inventory shelf buying has ended, where will the inflation numbers be? I can purchase items cheaper today in store's monthly sales flyers and stores focused upon deep discounting. I don't need the services I once had to pay premiums for, many are free on the internet. Korea news reported a glut of phones in Samsung's inventory. China factory news reported failed store purchase orders from certain U.S. companies for 3rd quarter. As inventory shelves are cleared out in discount sales, consumer inflation fails to exist. Oil & Gas prices have dropped, and copper along with many other commodities including agriculture. Where or how are you calculating your future forecast for inflation?

Dear Michael, Well said, well written. May I request your permission to FW your article. Some do not "get" what I have tried to wring through their ears after gaining substantial cyclical profits. The PMI figures were ugly today out of Europe, China, Japan. Q2 GDP was nasty in EU countries, Japan, Brazil et el yet Q3 may be far worse. Russian sanctions are already hurting EU nations and sanctions potentially to be increased further. What is every retail investor in America thinking? Who are the companies to sell their "inventory" shelves of goods to? Have investors not read Korea's headlines of Samsung's glut of unsold phones or China's Walmart supplier void of Q3 orders? U.S. industry analysts rate "market perform". That's why retail clients are amiss of macro picture. QE is funding equity securities purchases? In 1988/9 Japan Banks were reported purchasing equities. QE is funding corporate Buy-Back's? Japan's corporations kept the last leg of their equity market alive for a short while too... RR.

Dear Martin, Thanks for your updates, greatly appreciated. In the 1990's I attended your series of intense workshops in Vancouver BC CDA. I learned much. It was an amazing technical cyclical experience that I use each day to some degree. My Question is: Your computer charts showed Gold reaching "$10,000" spot price. Did I miss something? In 1999 thereabouts your warning was as to why the Euro will ultimately fail, economically. Did I hear Gold at $10,000 U.S. or 10,000 Euro? If the Euro was to demise, what is the total Euro denominated value of (a) debt securities and (b) derivatives directly associated? Conversion may ocurr how and to what? Mark? Franc? If my memory and chart copies are correct, Gold's forecast from your computer model 20 years ago (prior to the Euro) showed Gold spot $10,000. Derivatives were in infancy. Has the world of technical charts ever experienced anything similar to $650+ Trillion in notional derivatives? How many are Euro denominated? How may that potentially contribute to gold prices in U.S. dollar terms and/or Euro terms if the Euro were to ultimately demise (convert back to individual country currencies)? The Central Banks of each EM nation would retain purchase power if gold were accumulated prior to Euro's decline/demise? That's 28 Central Banks potentially? Do we have 15 year charts as to how gold performs not as to the direction of the U.S. dollar, rather as to the direction of the Euro (in terms of U.S. convertability)? If my memory holds well, in 1998/1999 gold was $390 thereabouts. The Euro has increased 30% and Gold has increased 300%. If the Euro were to decline 30% would gold decline 300%? When a currency depreciates, spirals downward, the value of gold in U.S. $ terms usually maintains relatively constant in comparison (as to other assets denominated in local currency). Gold is a usually a currency hedge as to a declining currency? If I buy my gold security/derivative product in Euro, may I sell it in $U.S.? If I buy gold bars in Euro, store the bars, may I sell in $U.S.? Or Yen? Or RMB? The convertabilty of physical gold into any currency allows for such gold holders to be done with currency forecasting? The U.S. dollar rises and gold falls. The Euro falls and Euro denominated gold rises? What then is Gold's price in Euro if the Euro were to demise? If the Euro were to substantially decline or demise, carry trades from Euro priced Gold to U.S. dollar could push U.S. spot gold prices up along with a rising U.S. dollar? Help me wrap my thinking around the value of gold, not as a hedge against inflation, rather a hedge against currency depreciation/deflation, currency depreciation/inflation, currency depreciation/stagflation and the possibility of Euro convertability (Euro demise). Thank you. And 20 years ago did your computer read 10,000 gold in some currency? RR.