--See? There is good news after all.

--What about gold? We keep harping on about it. And yes, it's still shiny and money-like. But it did fall back under US$900 overnight. What gives?

--The big driver of the gold price this year will be, as always, weakness in the U.S. dollar. Granted, gold is rising against other currencies too (the euro and the British pound). But it's the large increase in the supply of U.S. dollars that will ultimately catapult the yellow metal higher.

--Keep in mind, though, that the unwinding of the dollar standard is not going to be a rapid affair. Too many people have too much to lose from a rapid dollar depreciation. We'd expect gold's move to be driven by gradual investor capitulation on common stocks and government bonds. And THAT will be driven by market returns and inflation concerns (both of which should mount as the year progresses).

--Another date to watch for is September 26th, 2009. That's when the current European Central Bank Gold Agreement (CBGA) on sales expires. The first CBGA was signed in 1999, and depending on whom you ask, had a rather ambiguous goal. European central banks agreed to limit and publish their announced gold sales.

--The reason, we suspect, is that European Central Banks own gold as a reserve asset. Signatories of the first CBGA controlled 43.6% of the world's above ground gold reserves, according to the World Gold Council. The second CBGA was signed in 2004 and limited sales to a maximum of 500 tonnes per year over five years (2,500 tonnes over the length of the agreement). With the expansion of the EU, CBGA signatories now control 46.1% of the above ground gold reserves.

--So why cap official CB sales? As much as they prefer their own product-paper money-central banks own gold as a reserve asset. In 1999, the gold price languished at just US$252/ounce. For the CBs, this meant that value of a reserve asset was falling. And with the market wary that further CB sales could flood the gold market with excess supply at a time of lethargic demand, something had to be done to put a floor under the gold price.

--In order to assure the market that Central Bank sales would not (at least publicly) be used to suppress/depress the gold price, the CBGA was signed. Since then, it's provided transparency to planned central bank sales of gold. According to the WGC, France and Switzerland were sellers of gold least year, while Russia was a notable buyer.

--What will happen, then, when the current five-year agreement expires on September 26th of this year? Well, there's every chance a new agreement will replace it. But since we're in the business of looking for Black Swans, let us entertain the possibility that Central Banks abandon the agreement this year. Why would they do so?

--Global central banks are also large holders of U.S. dollars and U.S. dollar-denominated bonds. How reliable do you think either of those as reserve assets? Hmm.

--Also keep in mind that gold is now accessible to retail investors in a way it wasn't in 1999. Gold ETFs (if you take them at their word) own over 1,000 tonnes of gold. This makes ETFs the sixth-largest holder of above ground gold (behind the U.S., Germany, the IMF, France, and Italy).

--It's not a rash speculation to suggest that Central Banks will prefer to hold on to their gold this year rather than sell it at all. As competitive currency devaluation sweeps the globe in an all-out effort to fight asset deflation and recession, gold will become much more desirable as a reserve asset worth owning (not selling).

--Bankers are bankers, after all. Their product is money. But they have gold in their vaults for a reason. It was money before paper was money. So September 26th may mark the end of the orderly and coordinated management of gold sales by European Central Banks. And it may mark the beginning of a new monetary era where gold reasserts its importance as money.

--Is this good for gold miners? You bet it is! More on that tomorrow.