If you follow Antal Fekete you will note that in the end he does say that both gold and silver will soar to much higher prices.

True, and I agree we are still in a bull market. That said, we could drop to 650 and still be in a bull market. The issue I have with most gold analysts is that their time frame is too short. They see a raging bull where I see a more gradual rise that follows the gradual debasement of currencies.

To put the current monetary expansion in context, you have to remember that there are two components to monetary inflation. 1) the actual gross amount of currency issued, and 2) the amount that finds it's way into circulation. Right now no one is lending, but when they finally get around to it, my guess is they'll find very few are willing/able to borrow - at least on the new stricter terms, which will be an imperative of tougher financial regulation under Democrat leadership.

The other factor is how much sterilization will occur. Obviously not all the money issued will be extinguished, but some will, which should act as a brake on inflation and hence the rise in gold.

All in all, I see gold in terms of long term purchasing power protection, whereas to hear some talk, you'd think it was the latest dotcom. Gold preserves wealth over generations, but as a short term trade I wouldn't touch it except....

His main premise is that they use the paper market to get more of the phisical for themselves over time while generating paper profits from their physical holdings as well.

Exactly. In short, gold returns to central bank vaults. This is something that needs more attention - the flux of gold leaving and then returning to central banks as a result of leasing plus basis arbitrage. It's an important part of the monetary equation that gets very little notice - that is to say, "managing" the upward movement of gold, as opposed to "suppressing" it, which most Gold Cartel theorists assume.

ebear