Gold reaction ?

Martin Armstrong

Our first Monthly Bearish Reversal lies at 1465.70 and the next Weekly Bearish is at 1522.70. The major support begins at 1225 and our year-end number is 1434.
I may be the only long-term bullish analyst who is bearish on gold near-term. It is often hard to explain to people all the nonsense surrounding gold is just that – nonsense. Everything from fiat to the predictions we will head into hyperinflation are just so wrong, yet to say that guarantees 100 emails of pure hate.

Let me explain one more time why there is no inflation NOW despite the fact the Fed created almost $3 trillion of elastic money. When you have almost $60 trillion in debt, forget the derivatives and the unfunded liabilities, that contraction is far greater than the $3 trillion the Fed created. At the very least, there is a bare minimum of $15 trillion that evaporated in the deleveraging in debt on top of all the extreme numbers on derivatives. The efforts of QE1 and QE2 failed to stimulate and they failed to create inflation. We are suffering from DEFLATION at this time that is not yet over.

At the most extreme, gold could even collapse back to retest the 1980 high of $875 if we were to see a Quarterly closingBELOW 1113. That would shift the real rally most likely into the 2015-2020 time slot. For those that were at the Conference, we are reaching that point of maximum entropy where everyone who thought of buying has bought, and in the correction is likely to shake the tree.

When will gold rally? When we see new bond offerings go unsold in the USA. The critical place to watch is Europe and Japan.