Golden relationships.

It is readily evident, is it not, that many of the things this blog looks at are related. For instance, gold price and the dollar tends to change in reciprocal manner, inflation (monetary) is related to the change in money flow and money supply and the value of bonds goes down when inflation picks up. But, price inflation is modified by the economy: bad economy can reduce price inflation and so can deflation.

The Obama regime is seem to be bent on reproducing the Great Depression. Beginning with the change in the accounting system on Sep 15, 2008 (which stopped the financial system, put us into an instantaneous recession and electod Obama), the deflation has been used to mask the underlying inflation. It is also being used to selectively bankrupt companies which are then "rescued" and taken over by the government. As Van Jones (an Obama appointee and member of the Communist Party) had said, the goal is to destroy the Capitalist system of economy.

The destruction is done carefully, so it is not fast enough for the public to see and always is blamed on Bush. The FED tinkers with the accounting rules as recently pointed out in an article in Seeking Alpha by Ron Hera (Bernanke's Dilemma: Hyperinflation and the US Dollar). The FED then can control the rate of deflation by targeting part of the economy for destruction and bankruptcy.

There is a downside of deflation for the Obama regime. It puts the pressure on European Socialists and their schemes of ever-increasing national debts. In turn, the flow of European currencies into the dollar has created the illusion that the dollar is still a trusted currency. I suspect that the value of the dollar was artificially manipulated by our zombie banks as the coming rally in the dollar was announced in Seeking Alpha, which seems to have connections to financial circles. This rally in the dollar may be coming to an end which will lift the price of gold. While, the dollar has been topping out, gold has broken out of its downward correction. The 300 Day Moving averages tell the tale: the dollar remains in a bear market, gold is still in a bull market and the 300 DMA of 20-year treasuries has turned negative.

Bernanke's dilemma is that in order to sell treasuries, the interest rates have to rise (which will threaten the economic "recovery"), or if the FED "meneytized" some three trillion dollars in treasuries, it risks rapid inflation. In an election year, inflation is more politically tolerable than another economic collapse.

The radicals in charge are stuck on two Chinese curses: 1. may you live in interesting times and2. may you get what you wish for.