Gold Rush, Part 14

Gold futures crossed the $1,300 mark today and silver has hit 30-year highs as money has bounced from stocks to bonds to commodities.

Gold has risen more than 4 percent so far this month and hit record highs for five consecutive sessions to Wednesday, extending gains after the  Federal Reserve indicated it may consider further quantitative easing, undermining the dollar.

"The U.S. Fed is obviously contemplating, and the market is expecting, some kind of statement on quantitative easing," said Deutsche Bank analyst Daniel Brebner.

"The influx of new money in the system raises longer term expectations for inflationary forces." "If you look at peripheral Europe, you have sovereign risks which have been increasing for both Ireland and Portugal.

There is a likelihood that there will be some kind of move by the European Central Bank to resolve that challenge." These two factors, and the likelihood that the dollar value will continue to erode, mean there is potential for higher prices, he added.

"We could see some significant moves in gold and silver over the next quarter." Gold priced in Japanese yen also rose to its highest since late June at 110,335 yen an ounce after the yen slipped sharply on talk of a second intervention by Japanese authorities to stem the currency's gain.

Keep in mind that gold has to be, well, mined.  There's a finite amount of the stuff available at any given time. People are paying $1,300 an ounce for pieces of paper that say "You'll get gold in the future sometime."  Those are IOU's.

When people (and more importantly governments) start demanding physical stockpiles of the stuff rather than futures, then the price of gold will get really, really interesting.

Same goes with silver.  Silver I think has a long, long way to go upwards as this whole currency squeeze continues.  It's gone from $15 to over $21 an ounce since February.  Any time you see a commodity's price jump 40% like that to a 30 year high, something's not right with the economy, dig?

The stock market is now nothing more than Apple and Amazon. Literally. Check out where those two stocks were when Obama took office.

Amazon has doubled since then.

Apple has tripled since then.

Nothing left in the market but computerized algorithms trading binary digits.

When the bottom falls out of this one it's going to be catastrophic.

Meanwhile, the greenback hit a new record low against the Swiss franc. Peru and Brazil have announced they are buying US dollars as countries with dollar reserves (and that's everybody as you have to buy oil in dollars) are trying to save themselves.

The alarm bells are ringing worldwide now.