Yin & Yang, Dow & Gold

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As human beings we try to intellectualize and get to the bottom of
things.  We seek to find meaning in everything.  There must be a reason for what is happening at any given time.

Take for example the Dow’s stellar performance and gold’s lousy
performance even as monetary policy has gone reckless on a global
scale.  This goes against everything that humans who deal with the
financial markets think they know.  But what if we are just getting back
into symmetry?

dow.gold

Dow & Gold, daily chart


Money flew out of global stock markets in 2011 and it just
knee-jerked into gold in a dangerous way that distorted the investment
profile of the barbarous relic that is nothing more than an anchor to
monetary value.  What has happened since 2011 is fixing this
distortion.  What is so hard to understand about this?

The Dow, now negatively correlated to gold, is currently becoming
distorted with a high proportion of dumb money aggregates while gold is
left for dead by the dumb money (public, momentum speculators, etc.).

The inflation being promoted by our Dear (Monetary) Leader (DML) here
in the US and similar DML’s in Europe and Japan is coming into the
system.  Inflation is always destructive in some way, whether by gradual
and insidious rising prices or by inflated bubbles that pop and resolve
into deflationary fallout.

Contrary to the new analytical cult I have seen cropping up out there
about a grand new bull era in the USA, might we not consider that it is
just US stocks’ turn to suck in the bid?  Gold was still working off
the excess and thus was not a viable play in the global casino.  It was
not yet ready and there sat the Dow, at the November lows in response to
the anticipated Fiscal Cliff drama, just waiting for a knee jerk relief
bid.

It got it and things are coming into symmetry once again.  Gold is
much healthier than it was in 2011 and the Dow is much more risky than
it was in November. Biiwii.com

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