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Chart of the day is............

...the US dollar to Gold ratio.

The remarks scribbled on the chart should be enough, but just to make it clear methinks we just hit a short-term bottom for the ratio and I expect it to rise. The most likely scenario is the Dollar upping and gold downing. But also keep in mind that it's just a chart and these things are too revered by too many people...they only work til they don't.

Don't tell the Jim Sinclair sheep brigade that somebody dares to suggest a gold downturn, though. And the first person to use the phrase "gold backwardization" in a mail gets turned into a frog. These people want to believe that....

a) yes, there's deflation in currencies
b) gold is a currency
c) but deflation doesn't affect gold

.....which is what normal people call 'having your cake and eating it'. A smart friend of mine read a goldbug analysis of gold backwardization yesterday and called it "like a tealeaf reader obsessing over one tealeaf" which I thought was pretty accurate....and funny.