The FED is mulling policies that will increase inflation in order to encourage people to part ways more quickly with their cheapened dollars. This new STIMULUS will punish the thrifty and penalize those who save. It is a policy designed to reward debtors. It will be an encouragement to revive spendthrifty ways that precipitated the crisis.
Mr. Market has suspected this move for weeks. In case you haven’t noticed, the price of gold is now approaching $1,400 an ounce. Given these impending inflationary policies (as if we don’t already have many in place), I have the sneaking suspicion this level is still cheap.