"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Thursday, September 13, 2012

Which One would You Want to Own???

Now that the Fed has made it abundantly clear that they intend to further debauch the US Dollar so as to keep Wall Street happy, watch for gold to once again begin outperforming against US Treasuries. Notice that each previous round of QE, has sent the yellow metal higher against the price of the long bond as the latter appropriately responds to an increase in inflation expectations by such activity.

Compared to previous QE's, this round is relatively modest by comparison as a $40 billion per month price tag still is less than $500 billion annually. Still, there is Operation Twist occuring alongside of this. Either way, I would expect the pattern to resume in favor of gold now that the deed is history.

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