So....

So what if QEternity doesn't blow an inflationary bubble? Are you prepared for that?

If you're one of those Austrian wackaloons who thinks we're about to spiral into hyperinflation and won't hear a counterargument, you'll find it wise to immediately leave my blog and never return. You won't get a thing I'm saying and it'll just make you all angry and bothered.

Now, as for the rest of you....

We're in a deflationary debt-deleveraging environment. Bernanke's going to QE hard and fast now. That won't cause inflation because we're in a deflationary debt-deleveraging environment. Bernanke knows this cos he went to school or something. And I'm not one of those arrogant hayseeds who asserts that book-learnin' is for fools.

So what does that do to gold and silver?

Maybe they were just bid up because the first knee-jerk response is to expect inflation. I'm saying the first response was wrong. And some commentators in the market are already cluing in.

And what happens to bonds?

Maybe what will really happen is, to the extent that there is any new money entering the system, it gets dropped into safety assets. Because that's what you'd expect in a deflationary environment, isn't it?

Wouldn't it be funny if gold and silver were weak from here, while US bonds were strong?

Just keep that in the back of your mind while you're out among the lemmings nattering on about inflation.

Because maybe things are going in a different direction, and wouldn't it be nice to be on the right side of this trade?

I have no clue if this thesis above is right or wrong. I have to puzzle it out more. But I'm looking at today's action, and man oh man does it not look like silver and gold are going to da moon Alice.

UPDATE: Or, of course, maybe I'm wrong. I'm only saying, just keep a weather eye on bonds and the $CRB and stuff.