In a world awash with ignorance, aided by history’s most comprehensive, worldwide PROPAGANDA campaign – aimed at convincing the masses of a mythical economic recovery – few concepts are as badly misreported as “inflation.” By definition, it represents the change in the money supply – of which consumer prices changes are but a symptom, and NOT the cause.
In the “stratosphere of stupidity,” the mischaracterization of inflation is paralleled only by that of “bubble.” To that end, no word portrays greater FEAR in market participants; as EVERY one that has been inflated has ended in chaos. Historically, more than 90% of “bubble participants” ultimately lose money, with the great majority losing more than 50%. Sadly, human nature guides all but the most seasoned investors to “buy high” and “sell low”; and in most cases, to buy at the high, and sell at the low.
In today’s Bizarro World of government intervention, the bought-and-paid-for MSM has been trained to purport “enemy asset classes” – such as Precious Metals and crude oil – as bubbles; while conversely, “friendly” assets like stocks, bonds, and real estate are not only NEVER in bubbles, but “undervalued.” Every manner of false or misleading statements and acts are evinced to make such points; but most often, the simple act of manipulating markets. That is, when the PPT gooses stocks, or the Fed “QE’s” bonds, the MSM (plus Washington and Wall Street) portray such action as “evidence” of economic recovery. Conversely, when massive PM naked shorts are perpetrated, the resulting PAPER price declines are heralded as “bursting bubbles.” No matter that REAL, EMPIRICAL data depicts a rapidly weakening economy, and strengthening PHYSICAL gold and silver demand, of course.
I’ve noted in dozens of articles – such as the “PRECIOUS METALS ANTI-BUBBLE” – how gold and silver are not only more undervalued than at any time in our lifetimes (and possibly, history); but conversely, demonstrate characteristics diametrically opposed to those of bubbles. As to financial assets, I wish I could say the same; as care of five years of unprecedented MONEY PRINTING and MARKET MANIPULATION, equity and fixed income valuations have become as detached with reality as those of gold and silver.
In the former cases, the mentality is different than past bubbles; as today, government stock and bond support – both overt and covert – represent a significant percentage of overall buying. In other words, we are not seeing financial “manias” – as with 1990s internet stocks or 2000s real estate; but instead, exaggerated “confidence” due to supposedly ironclad “puts” from Bernanke, Draghi, Kuroda, Carney, and other leading Central bankers.
As I noted above, ALL bubbles end in tears; and conversely, I believe the PM “anti-bubble” will end in the opposite manner – that is, with their historic under-valuations “over-correcting” to the upside. That’s why I continue to sit tight with my PHYSICAL gold and silver – i.e, PROTECTION against what’s coming – and wait.