Perhaps the money printing has been causing the run-up in commodities(energy, some foods and clothing) while leveraged assets (real estate, automobiles and stocks of over-borrowed companies)deflate due to the unwinding of the debt bubble. A huge factor is unemployment which, by reasonable comparisons has reached 1930s depression levels. One in six are now out of work under the U6 method, counting those who no longer qualify for unemployment benefits, or who have accepted minimal wage part time work in lieu of full time. In the 1930s, they took the number of men of working age and subtracted those who actually worked full time to get the unemployment rate; there was no game playing with the numbers. High unemployment causes further deflation of leveraged assets. So you have money printing versus depression, painting a confusing picture for gold.

I personally think the Federal Reserve is a big fraud. Let's see now - they're a private megabank, completely unaccountable to the Congress and by extension the People, they keep their books closed, they do not have to tell us how much gold we have (for all we know it could all be sold and we're just charging rent to store it), they ride to the rescue of their Ivy League cronies' the Fed Head from NY, now Treasury Secretary is an obvious tax cheat. Now we want to give them more power???? Huh? Are they joking? We should completely dissolve the Fed and end their fiat currency scheme. And BTW, I disagree about the price of gold. The Fed is frantically trying to reinflate the bubbles that busted already by easy credit. By printing worthless money. Don't let the seeming calm before the Storm fool you.

Hmmm... real inflation still sits at > 6% despite reduced demand for stuff. (shadowstats.com alternate data) Since gold's price now simply reflects the substantial inflation we've been experiencing since 2000, I don't see why modest inflation now won't continue to push the gold price up (vs. dollar). Remember, the Weimer hyperinflation started during a recession. I think the last straw was when the gov started to hand out money to miners who refused to work for the French (as part of war reparations). I don't know if that is analogous to unemployment compensation today, but it makes me wonder. It looks like Congress is now considering increasing the capital requirements and scaling that by the size of the bank. Maybe that is a way to soak up some of the increased money supply and help limit inflation. Hopefully.

Cody, you are probably right that we are on the verge of a deflationary cycle due to debt destruction. It seems that all the FED is doing is adding reserves to the banks as they continue to suffer losses on their toxic portfolios. Any attempt to restructure real estate mortgages brings a re-default which adds to the problem. Just thinking about the fact that debt is supporting all investment rather than a savings pool gives me an uneasy feeling. When you add the rush to nationalize healthcare and give more regulatory supervision to the FED, this uneasy feeling gets downright ugly. Stocks have been acting toppy for several weeks and when selling in earnest begins, gold will follow. The inflation-deflation arguments can always be swayed by unknown events so I prefer to take any action by supporting political change. Hopefully, this coming price collapse brings out support for the liberty movement rather than concentrate more power with our political elite. I think the race is on and I for one am doing all I can to support liberty. I hope we can prevail.

Gold is not going down, this is wishful thinking so people will put money back in the failed stock market. The rules have changed and the stock market is old news.

Cody, Many analysts are going to look like fools as the Fed tries to save the monetary system the f@*ked up. I believe we are a stones throw away from hyper-inflation. Hyper-inflation happens in EXACTLY the type of environment we are in now. History it littered with examples and we will most likely be next as the Fed/Treasury tries to maintain the unsustainable. The only option Fed members and politicians have left (to literally save their lives) is to throw EVERYTHING at the MONSTER they have created. In the end it will collapse, but they will try to save themselves by saying they tried to do "everything they could" to save the system. It is absolutely pathetic that we are now in this situation because our leaders did not have the backbone to put a halt to it when they still had the opportunity.

Cody, How can you be a contrarian if you are doing what everybody is saying? Isn't that a conformist. I started reading you cause I though you maybe had some experience to give but now I see you are just a young buck looking for attention and following the whim of the masses. You lost another one and I'm sure many more as you begin to spout nonsense like that of the last two days.

I think the true irony of gold is that it is only a hedge against currencies if the currencies stay afloat. Agreed gold goes up in a general sense as the dollar comes down...but how does gold "value" go up? For most people the cost/value of gold is found via how many dollars it take to buy gold. What happens when the dollar is completely shot? What then is the actual value of gold...is it how many loafs of bread you can buy with your gold? If you are buying gold are you holding it in your safe or buying a gold fund of some sort? If you are buying a fund and the dollar takes a nose dive do you really think you can show up and cash in your gold shares for a portion of a piece of gold? I think gold is only a hedge if the system stays relatively strong...if all the spending and bad policy really go bad than at the end of the day you may be holding gold and dollars that are equally worthless.

Cody, Thanks for the explanation about gold price dropping.

I agree, commodities in general are now inflationary. Financial and hard assets are in a deflationary cycle. Speculators, through the use of derivatives, have gotten out of the real estate and financial markets and gone back into commodities. This is driving the price of commodities up and allowing the value of hard assets down. An example of this happened to oil in late 2008. Oil dropped from $ 140/ barrel in mid 2008 to $ 40 at year end. According to the Bank for International Settlement, the total over-the-counter commodities derivatives dropped 80% during the same period. Today oil is back up to $70 , a sure sign the speculators are back. As far as the financial regulators are concerned, they were neutered in 1999 and haven’t gotten over it yet. If you want to find the real cause of our current financial problems take a long hard look at the Bank Modernization Act of 1999. There you will find the destruction of the saving and loan industry, the creation of the mega-banks, the restriction of the regulators, and most destructively the legalization of derivatives.

Remember the advertising, gold has never been worth nothing! Even if were back to $35 per oz., an ETF that is buying and selling bullion over time, whether at higher or lower prices will maintain its inventory of supply and maintain value of its inventory by dollar (unit?) cost averaging. Over time, this is sufficient to perpetuate a retirement portfolio - especially one that does not pay dividends; I am satisfied that it is still a good investment.