Into The Grey Zone The future is always a grey zone, never black and white.

The US government continues borrowing at a pace that seems beyond absurd. For September 2009, the Treasury borrowed $572 BILLION dollars in that month alone. As I write this it is only October 7th, yet the Treasury has borrowed $130 billion so far this month. These numbers are so absurd, so far beyond the pale that I don't think anyone really understands the magnitude of this mess. And yet at the same time, asset values continue to collapse. Deflation is clearly winning this game but the government printing press is going to have an impact even in deflation, mainly in the form of transferring your wealth to the robber-barons of Goldman Sachs.

I no longer believe the goal is to inflate away our debts. It is my personal opinion that the underlying goal here is to saddle US citizens and the US government with so much debt that it becomes a malleable and compliant member of the new world order. In the process, what wealth the US had remaining is being transferred to those in power. This will create a huge underclass, desperate for jobs, owning no real property, and at the whim of whatever ugly corporate powers arise as our nation and the world continues down the fascist road.

As such, the surge in gold prices, above $1048 per ounce as I write, appears to be less an inflation indicator than it is an indicator of people attempting to simply preserve wealth as the dollar faces an uncertain future. One very likely result downstream is the eventual tossing aside of the dollar as the world's reserve currency. I don't expect that instantly, but there are sufficient nations with sufficient reasons to not want to hold dollars that the dollar might collapse at some point in the future. Thus we see a flight to gold as the last refuge from the dollar, which used to be the "flight to safety" currency. It is entirely possible that gold may now be assuming the "flight to safety" role over the uncertain dollar.

But the weirdness is out there and growing. Just yesterday we had bond prices up, stock prices up, commodity prices up, and the dollar was up (albeit a tiny amount). Lining those 4 things up at the same time definitely constitutes weird, especially when the DOW and S&P 500 charts overlaid one another nearly perfectly and both stock indexes gained exactly 1.37%. (Ignore that man behind the curtain!)

I will say that the weirder it gets the more likely I feel that a correction is coming. Hold onto your hats. There may be a bit of a fall breeze blowing through the economy soon.