Amazing to me, having followed, traded, and invested in gold over the last 8 years, that there are still so many gold skeptics out there. Like being wrong for a decade isn't enough?

Gold bears have trouble with basic comprehension of the bull market. Primary example is Ben Bernanke, who naively stated before Congress that he "didn't understand" why gold was going up. Why Ben, it's easy: It's because you are creating mountains of debt and paper money. You want some gold coins or burning paper money? What's not to understand?

This morning, Gold is breaking out again into bull territory, the beginning of a new phase that will likely carry it back above $1,300 by year-end. The correction is over.

Here's the problem with the gold bears: They pull their hair out try to "understand" the gold rally and rationalize why it's "not right." That's because gold haters would rather believe in the government or Wall Street instead of a brick of gold. Personally I'd rather have a brick of gold in my safe than a few uncomprehensible derivatives securities.

Here are the facts about the gold rally once and for all:

1) Technically, it looks, smells, and feels like a secular bull market that is about to hit its parabolic, blow-off stage. So why doubt it?

2) Gold is up 400% in 8 years. Stocks, flat. Bears say, "That's means it's time to sell now, it's so high!" But high relative to what? It's high relatve to crappy paper stocks and a weak U.S. Dollar. That's not a reason to sell because it is the erosion of a credit bubble and attempted deleveraging of paper assets that's sending gold skyward. That trend remains intact, even as the government attempts to reflate.

3) The financial TV pundits mistakenly keep saying that gold is an inflation play. Well, not always. How do you explain the massive rally in gold mining stocks in the depression? Gold bears should notice that gold was rallying in 2006, when there was inflation, but it was also making new highs in 2009, a disinflationary environment.  Gold is an anti-debt and anti-paper play. The smart money knows the danger of the current debt situation and the potential revaluation. That's why they are acquiring gold.

4). China. Do you really think China trusts treasuries and dollars in their piggy bank? Do you really think when choosing between a raft of sketchy global fiat currencies and gold, the Chinese people would rather have American dollars than a gold bar? Think again.

Don't believe me? Follow the experts. Jim Sinclair, Eric Sprott, and Eric De Groot, all professionals that have followed this gold market from its inception, say the rally has a long way to go. Jim Sinclair likes #1600 in 2011. Follow the smart money.