THE TRAP DOOR IS NOW SHUT

In our last Blog we talked about gaps and their importance in the market's next move.....gold has burst higher....followed by oil. The US Dollar is lower and looking much lower. Asia remains well bid (as it should) and bonds & cash are getting killed. Key stocks like GE are gapping higher.

Four months to go to year end and most money managers are under-performing the equity markets and much more importantly trillions are now held at losses in cash and bonds realtive to equities....we are in the first inning of this massive (devaluation) inflationary shift.....and 99.9% of the market participants are fighting the tape and are trapped.

Retail investors continue to favor bonds over equities. US cash balances declined by $300 billion since March..of which $250 billion went into bonds.

A famous blogger said, "At some point voters are going to demand that their federal government show some of the same restraint that households, cities, and counties are being forced into." We of course agree.....in fact "government" is peaking as we speak...they just don't know it yet. A stock market positive.

The fed in its quantitative easing policy is a bit like the attitudes of public companies who bought back stock in the open market for the past five years...collectively losing trillions of cash dollars in their moves....the same will be true for the fed....the difference they are printing money.....if the US Dollar goes down 1% ...gold will go up 1%. The world has now caught on to this...wdc, llc is now way behind the curve.

A recent advertisement in the NY Times said, "How big is a trillion? One million seconds equals 12 days. One trillion seconds is more than 30,000 years!" And the White house projects the federal debt will grow by more than $9 trillion in the next 10 years! What are these people smoking?

The race for hard assets has begun....

Danny Boy seen here watching over his hard assets like a hawk.