Take physic, pomp

Chart of the day is…………

…the US dollar to Gold ratio.

The remarks scribbled on the chart should be enough, but just to make it clear methinks we just hit a short-term bottom for the ratio and I expect it to rise. The most likely scenario is the Dollar upping and gold downing. But also keep in mind that it’s just a chart and these things are too revered by too many people…they only work til they don’t.

Don’t tell the Jim Sinclair sheep brigade that somebody dares to suggest a gold downturn, though. And the first person to use the phrase “gold backwardization” in a mail gets turned into a frog. These people want to believe that….

a) yes, there’s deflation in currencies
b) gold is a currency
c) but deflation doesn’t affect gold

…..which is what normal people call ‘having your cake and eating it’. A smart friend of mine read a goldbug analysis of gold backwardization yesterday and called it “like a tealeaf reader obsessing over one tealeaf” which I thought was pretty accurate….and funny.

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