I have seen repeatedly in my life where markets have dropped 40% or 50%… And in some cases I have seen the market like the Dow Jones drop 21% in one day…

We all know what the establishment did in the 1970s. When gold raced over $800 in January 1980, they said, “We will pretend that this whole affair never happened. It is too embarrassing to admit that we were wrong and the gold bugs were right.” Those who do not learn from history are condemned to repeat it. And repeat it (the seventies) they are.

Silver can be described as gold’s little brother. It lags along behind gold, underperforming for a long time. Then, all of a sudden, it comes to life, makes up all of its underperformance and goes on to exceed gold to the upside. Gold has a reputation for stability and conservatism. Silver is volatile and subject to big price moves – both up and down.

There be some vile, dastardly creatures who seek their economic goods from others by stealing that which these others have produced. Back in the Dark Ages (an evil time) a class of men (the Medieval Aristocracy) organized criminal gangs to abuse, torture and rob the common people of their day. These men called themselves governments, and they gave the Dark Ages its name.

It is difficult to understand how idiocy like this gets parroted throughout our society when the only proper place for it is the mental institutions of said society.

Upon the completion of QE2, the U.S. money supply will have approximately tripled in some 3 years. What will the results be? Well, general prices in the U.S. will approximately triple.

Now you all know what has been going on in the markets over the past few weeks. The Fed has begun another program of the massive printing of money, this one labeled QE2 and estimated to amount to $600 billion (although larger numbers are mentioned). If we consider the (more than) doubling of the U.S. money supply which has occurred between mid-2008 and November 2010, then QE2 will bring the total increase in money up to approximately a triple. And this leads me to expect an increase in consumer prices (from current levels) to approximately triple over the next 3 years.

Today I would like to continue my discussion of the (so-called) Great Depression as this is the giant lie which is behind most of the other economic lies which have deceived so many people and cost them so much money.

America is in very big trouble because the inmates are in charge of the asylum. Bernanke, for example, thinks that he is boosting the U.S. economy. How is it possible to improve the nation’s economy by counterfeiting money?

It is well known that silver is more volatile than gold. You can make more, but you can lose more. The key is to know when silver is playing possum and when it is waking up.

Hey, wait a minute Mr. Geithner, weren’t you talking, just a minute ago, about love and good will toward all men? It’s only the political right which engages in hate. Aren’t you all men of the left? Aren’t you for love and peace? Then how could you have come into a field as benign and harmonious as economics and turned it into a war? After all, Adam Smith showed us that everything in economics operates by a harmony of self interest.

For those of you who are wondering just how far this current move in silver will carry, the price objective line offers a clue. It is currently closing in on $26. So we must consider the possibility that there will be a short term reaction in silver, which will take us back to the breakout point ($20-21).

Sad, sad news in the daily paper this week. We live in a world where the leaders of our country, and every country in the world, believe that there is nothing more to the production of wealth than to simply create, out of nothing, the money which symbolizes it.

Ah, yes, the silver bubble of 1978-80 was a time to remember in financial history. Bunker Hunt, heir to the H.L. Hunt fortune, became an aggressive bull on silver and tried to engineer a silver corner. But no one has ever engineered a corner on a free market, and Bunker Hunt did not become the first. He stayed too long. He overplayed his hand. And when the bubble collapsed, he lost his daddy’s fortune.

As we have seen, both gold and silver hit important highs in March 2008. However, since that time gold has gone up almost 30%, and silver is flat. So we have just been through a substantial period when silver lagged. Similarly, the exploration stocks (as measured by the CDNX) lagged badly in 2008. Will they now start to play catch up?

The world is about to get a sobering lesson over the next year or two as the precious metals markets move explosively to the up side. As happens so often in the affairs of men, reality is there in front of us just sitting and being itself. Yet so few of the species homo sapiens can see it.

My basic philosophy is that the universe is governed by the law of cause and effect. This is why science has been so successful in finding out so many relationships. If B occurs shortly after A occurs and if this happens again and again and again, it becomes more and more likely that A causes B.

In mid-September 2008, the New York Times began to scream, in a series of big headlines, that the nation was in a financial crisis. I have studied the American media, and it is absolutely amazing. The overwhelming majority of newspapers will pick up a line of propaganda from the Times and repeat it mindlessly ad infinitum.

The time has come. Look to the skies. ~ The price of gold is on the rise. ~ In bullish years, on Labor Day ~ The price of gold becomes in play.

The two biggest headlines in the New York Times over the course of the 20 th century were Pearl Harbor and the landing of men on the moon. The “financial crisis” of 2008 was only slightly behind these two in size of headline and quantity of space. And it surpassed them in frequency of repetition. Both Pearl Harbor and the moon landing only happened once. But the “financial crisis” of 2008, not being a real event, could be strung out and reported over and over.

Here is the problem. The client has not come to appreciate just how ignorant and irrational today’s media is. You can count on it. The media will speak with one voice and with great confidence. They will be humiliatingly and embarrassingly wrong, over and over and over. And then they will refuse to acknowledge their horrific error.

The last part of “hyperinflation” is “inflation,” and this is perhaps the most important part (because it receives the least comment). If we examine the word “inflation” as it is used outside of economics, then it always means a going up. For example, one inflates a balloon or an inner tube. Always it refers to something which gets bigger.

Strangely enough, some people in the gold bug community try to erect a wall between gold as an “investment” and gold as a political issue. “Investment” is in quotes because the abolition of the gold standard means that no investment is possible in the world anymore (with the possible exception of Switzerland).

Last week I argued that the theory of a coming decline in prices just around the corner was a balloon full of hot air, and like all such balloons it was bound to sail into the atmosphere. So far from this “deflation” theory being true, it is a deliberate falsehood and in fact is a very good indicator that the exact opposite will happen.

As with any misinformation, one must make a distinction between a deliberate lie and an honest mistake. As I have studied this, it is clear to me that, at the very top, it is deliberate.

Today I wish to continue my theme that the theory of “deflation” propounded by the media in late 2008 is the main enemy of speculator profits at this time. I have argued that the theory is false a) because there is not the slightest evidence of declining prices and b) because there is enormous evidence of a massive rise in prices to come (perhaps the greatest rise since the depreciation of the American continental from 1776 to 1780).

“All around him there is just one opinion. He never hears the contrary view. He does not know that there is a contrary view. Soon the vast majority of the country is of this one opinion.”

The issue of investment versus speculation is much more important than you realize. Almost everyone, except for me, will tell you that you are an investor. But an investor is someone who wants to put his money to work (meaning either earning real interest or a return on capital such as dividends on stocks or rent on real estate). The speculator wants to make a profit by buying low and selling high.

Of the various technical theories on the markets, my criteria for deciding which ones to use is based on what works. And I have found the best results with the chart patterns described in Technical Analysis of Stock Trends by Edwards and Magee. These are simple, geometric patterns with forecasting implications.

Most market trends are caused by large-scale forces too big for most traders to comprehend. They wind up assuming that current prices are near the fair price, and they are reluctant to pay more. This reluctance slows down the bull trend, but the fundamental, large scale force keeps tilting the balance to the upside. In effect, the idea of a fair price keeps the market undervalued for a long, long time.

The importance of this [budget deficit] for the price of gold lies in the fact that any deficit of any size in any democratic country is not financed by borrowing the money. It is financed by printing the money.

Then what was this all about? Why were markets rushing up and down? Why were the newspaper headlines screaming? Why was there violence in the streets, with people being killed? Everybody wanted to borrow, and nobody had any money to lend. That, of course, is the way of the world. If you don’t like this fact, then I suggest you take it up with the Creator of the world.

The important technical accomplishment of this week is the break of the Dec. 3, 2009 high at $1,225. On a long term chart, this reaffirms the long term gold bull market. A bull market is defined by a pattern of higher highs and higher lows, and the new high is now in place.

Either Ben Bernanke will choose to follow Rome and destroy his society, or he will stop the currency debasement before it gets to that point. Here your guess is as good as mine. If he stops it, the stock market will probably return (in real terms) to its 1982 level.

The coming short term market period should be very exciting. Gold should now mount its assault on its Dec. high. If this can be breached, then the pattern of higher highs and higher lows will be reaffirmed.

Many a weekend since the beginning of the year has been occupied by a “crisis” in the euro. But this weekend’s “crisis” seems to be the mother of them all. As such, it will probably put an end to them, and the gold market will pull out of its funk and resume its bull trend.

Well, what is it? Is gold moving sideways, or is it moving up? And this is not just a matter of semantics. The question is being asked from the very practical viewpoint of how do I make the most money?

The explosive move in gold which I have been predicting for some months is now under way. He who hesitates is not lost, but he does make smaller profits. You have undoubtedly heard of the death of a thousand cuts. You now face the death (of your profit) by a thousand decisions to do nothing.

The vast majority of people do not understand what is happening. The printing of money is a counterfeiting racket run against them by their own government. To avoid being robbed, they must be in gold. This is why every organ of establishment opinion denounces gold and tries to scare you away from it. If you value your hard earned wealth, do not listen to them

…now the problem has mushroomed far beyond this simple scenario. Formerly, we faced a government which wanted to violate our property rights. But now we face a government which wants to violate our right to life.

This is directed toward those readers who have heeded the siren song of the establishment and have put their assets into the stock market. I say to you: NO STOCKS, NO STOCKS, NO STOCKS, not at this time.

Unemployment has become the central issue of our day and perfectly illustrates the genius of Ayn Rand in putting the spotlight on altruism as the central concept which is destroying our society.

The subject of unemployment is the centerpiece of our modern economy. Let us imagine an economic discussion between a “liberal” and a conservative.

Part of the explanation for the Dec.-Jan. decline in gold is the attack on the euro which is now going on in the media. Indeed, the euro topped out very close to the exact day of the top in gold.

There has been a sense in the gold market through the month of February that gold is going down, a sense of negativity and discouragement. Gold bugs are giving up and pulling out. The U.S. dollar index hit 81 on Friday. The Fed is tightening. “What more,” say the bears, “is there to say?”

This is the problem with our age. So much data is being shoveled out at us that the human mind cannot comprehend it. The human mind is overwhelmed. Back in the days before the computer the need for understanding the data was much greater than the need for more data.

Gold’s action was scary last week – for all those who focus only on the short term. But these are precisely the people who cannot see the big picture. And because they cannot see the big picture they cannot predict the big move. And the big money, I remind you, is made in the big move.

When the short term is a puzzle, I take refuge by studying the long term, and so I thought that this week might be a good time to review the long term situation.

This week the One-handed Economist features a giant double top in the U.S. dollar index, a chart pattern which completed on Aug. 1, 2009 and has been dominating both the currency markets and the commodity markets ever since.

This evidence is good enough to play and the One-handed Economist is back in a bullish position with regard to gold and gold stocks. We will soon know if this is correct because gold will rise and break above the Dec. 3 peak of $1,229.

Everybody in economics who had some kind of a title was a blithering idiot. None of them had any knowledge at all.

The change of the old order has important implications for the financial markets in general and for the gold market in particular for the simple reason that politics affects economics.

Today we stand on the threshold of one of the great moves in financial history. The signal comes as what is called a pullback to support. It will be my goal in this article to convey to you the immense power of such a formation.

Gold bugs have been sad for the past few weeks as gold has tumbled from above $1200/oz. Cheer up gold bugs.

Right now the financial markets are telling us a story which is so incredible, so fantastic and filled with such opportunities for profit that I am in awe. I can only remember two comparable opportunities in my lifetime, the bottom in gold at $35/oz. in the summer of 1970 and the bottom in stocks in the summer of 1982 at 780 DJI.

Truth is the most valuable commodity in the universe, even more valuable than gold. Just as we had a short squeeze in gold after Thanksgiving, so we have had a short squeeze in truth over the past year. Never have the lies been so thick and fast. All those who were short of truth (such as Paul Krugman) were run in and forced to cover, and they took horrific losses. Now they will hide the truth and pretend that they are making money.

Can’t anybody see this? Economic goods fluctuate in value. Sometimes they get too low in value, and sometimes they get too high in value. It is a challenge to the good speculator to correctly determine whether the particular good in which he is interested is too low or too high. Therefore, he cannot be either a stock bug or a gold bug all the time.

On Oct. 12, 2009, Paul Krugman, columnist for the New York Times did his column attacking the gold standard and defending the bankers privilege to create money. This was such a perfect exposition of the lies of our age that it bares closer examination. Because the more one digs into this issue the more things are not as they seem.

The gold stocks caught on fire over the past fortnight. They have lagged behind the metal in relative strength, but, since they are more volatile than the metal, bigger profits are the result. For example, gold is well above its early September levels, but the XAU and the HUI have only broken above their corresponding levels just last week.

Is it too late to become a gold bug? Are you one of those who did not listen to the one-handed economist? Worse, did you fly to “safety” in the U.S. dollar? Are you thinking, “Is it too late to buy?”