Not that I am a big fan of Bob Moriarty, but he has made a few good points in his latest article below. I might define his Brave New World as systemic naked shorting of mining shares.

Regards - VHF

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Gold Leverage

Bob Moriarty

Feb 23, 2012

With a Greek default scheduled for March 20th and WWIII planned by our masters in Israel it might be a good time to own some gold. I’m going to presume all my readers have taken out a gold/silver insurance policy over the last 11 years. But the question is what do you buy once you own a safe insurance policy hopefully under your bed.

The answer is resource shares. It might be gold or silver or energy or even water. I have attached a chart I printed out yesterday showing the ratio of the XAU to Gold. It’s a pure measure of investor psychology. When investors are bullish, they prefer gold shares (XAU), when they are bearish, they prefer GOLD.

The chart dropped to an all time record low last August and has never recovered. So basically with $1700 gold, investors are more bearish than they were at $252 gold. That doesn’t make any sense at all. This chart used to be the best forecasting tool around for predicting tops and bottoms in gold but has been ineffective since August of 2008 when we entered a Brave New World.