Another Fed day, another episode of serial money printing, another banner day and a new high for gold.

It really feels like gold has entered the final and most exciting stage of the bull market. As Jim Sinclair, long-term gold trader, Chairman of Tanzanian Royalty Exploration, and Publisher of JSMineset.com says, gold is ready to go ballistic.

It's another breakout in a series of powerful breakouts. We've been alerting you to these breakouts ever since this site was launched. Remember this one? Or what about this one?  And this one.

It seems to happen at least twice a year now, gold consolidates for about six months and then breaks out into a powerful $200 move. But silver is now the star, having doubled in less than a year!

Here's some good reading on the topic:

• Investor Uprising has a great technical look at gold by Fred Goodman.
• My new site, Investor Uprising, has published an new exhaustive, 28-page report on gold, written by yours truly.
• Jim Sinclair says we're headed for $1650 next on the way to $2000.

 

Well, the Fed's dangerous game has commenced. Yesterday the Federal Reserve Board voted to crank up the printing-presses even harder, setting aside another $600B or so to buy bonds and other assets through June of 2011. This morning, markets are on fire, especially commodities such as copper, cotton, gold, silver, and the grains.

Keep in mind that this is an "experimental" policy on a historic scale. The most powerful central bank in the world is firing up the world's most powerful printing press in a way never used before -- to buy back trillions of its own bonds.

Kind of a slow day in the news, eh? That's probably because after the Fed announced it will continue its free money for Wall Street policy indefinitely, there was nothing left to say. At any rate, here are a few items on my screen:

• Dow sets new 52-week high (Wall Street Journal). Breakout or fakeout! Tough call.
• Inflation's siren song (Wall Street Journal). My prediction, the Fed will keep printing money until gold is $5,000.
• The chips are chipper (Reuters).
• Thinking wind power? Solar? Nuclear? Ethanol. Nah, try coal (Bloomberg)
• Microsoft is out with Explorer 9 (PCWorld)
• Swedish music service Spotify says it has 320,000 paying users. (NetworkWorld)
• $2 Trillion in new debt. Looks like we just picked up Wall Street's tab (CBSNews)
• I wasn't going to buy the home, then I saw the realtor's headshot on the sign (The Onion)

Sometimes America can be myopic, self-centered, and oblivious. Today is one of those days when many of the news outlets are focusing on Twitter, the Toyota recalls, and Taylor Swift. With more chaos brewing in the Middle East, it's a good time to remember that there are some major wars underway. I only say this because these are disturbing times, and we have to be reminded of the fact of the dangers of global political conflicts. Keep it in mind. Let me catch you up to date on what's going on "out there," as well as other stuff:

• Violence in Israel is flaring up again, following the reopening of a synagogue in Jerusalem's Old City (The Guardian).
• The Obama adminstration and Benjamin Netanyahu are headed for a showdown (NPR)
• George Mitchell's Israel trip is on hold (Politico)
• What does it mean for Iran? Well, the eminent bombing rumors that have circulated may be put on hold. (Huffington Post)
• Several folks think Biden's trip to Israel was aimed at discussing the bombing of Iran. Instead, it devolved into a critique of Israel's settlement policies. (Politico)
• The US and EU are calling for a "clear response" to Iran. Some believe that bombing isn't yet off the table. (AFP)
• Iran is standing its ground (Tehran Times)
• Zero Hedge technical take predicts a  market crash in April (Zero Hedge)
• U.S. Housing starts declined 5.9% in February (Bloomberg). Do housing start numbers in the dead of winter really matter?
• The Fed wants to "avoid lower inflation" (Bloomberg). Isn't that another euphemism for printing money?
• U.S. lawmakers are going to press China for action on currency (Reuters). Yippee! Trade War with China! Just what we all need!
• Sony has signed a $250M deal with the Michael Jackson estate on forthcoming albums involving both previously unreleased material and famiar ones. (Wall Street Journal). Just beat it!
• Core Strength Training for Men. (Wall Street Journal). I just think it's funny that you can find this stuff on a Wall Street Journal page.
• Is China-Google a lose-lose scenario? (Associated Press)
• Google's biggest blunder: Not letting Microsoft buy Yahoo (Slate). I can go with it.
• Vitamin D linked to lower heart disease risk (L.A. Times)

Today's "jobs Friday," when the federal government announces its mystifying and statistically incomprehensible report on jobs, thus assuring the job security of media pundits everywhere. And hey, I'm one of them! What's interesting about this month's jobs report, with a report of 36,000 lob losses (less than expected) is not so much its contents, but the market's reaction. All markets are up. That reaction says to me: Inflation ahead. Keep in mind, when everybody is getting fired, it's very hard to create inflation, because nobody has any money to buy anything. However, once the printing presses start running, and job losses start to diminish, all it takes is the slightest bit of hiring to create inflation. Why is that? Because the feds have pumped trillions of dollars of money into the system, and all the banks and consumers need is a whiff of things improving to get the ball rolling again.  Right now that money is trapped on banks, who are clutching it with their fists, saving it for more potential losses or to lend out, if things get better. With that trillions of dollars of liquidity out there, that means that inflation will accelerate meaningfully if there is only a slight uptick in demand.

There are increasing signs that China's heading for big economic changes, and that will likely fuel an increase to the market chaos. The most recent speculation involves a potential upward revaluation of the Chinese Yuan against foreign currencies. Goldman Sachs Chief Economist Jim O'Neill (no lightweight) -- says that something is brewing in China as they may be preparing the revalue the Yuan higher by as much as 5%. This would represent another leg of Chinese monetary tightening. China has been tightening its monetary policy by requiring banks to increase reserves. It has a history of raising reserves repeatedly when it goes into a tightening mode. A Yuan revaluation would represent a big move to cool off growth and stave off inflation, which has been increasing in China. Marketwatch reports that real-estate prices on the Chinese vacation island of Hainan have increased 30% in one week.  That's almost the definition of hyperinflation.

For those of you who haven't been paying attention, the markets have been pressured by a Greek debt crisis, in addition to similar simmering crises in Spain and Portugal. Credit Default Swaps (CDSes) on those Mediteranean nations have "blown out" -- indicating high risk of default. This morning, though, markets are rallying strongly as there is a whiff of a Euro-bailout of Greece in the air. European markets, gold, oil, and the Euro have all rallied powerfully in the last hour, indicating that something may be up. The New York Times reports that Jean-Claude Trichet, the European Central Bank president, cut short a trip to take part in a special European summit this week, giving rise to speculation that they are about to pull the trigger on some sort of rescue plan. The Wall Street Journal says the Greek banking crisis will likely force the Euro bank's hand. For anybody who doesn't think the crisis was serious enough, take a look at the chart below, which shows the CDS swaps on Greek and Portuguese debt rising to levels higher than at the global market bottoms of spring of 2009. [caption id="attachment_1060" align="aligncenter" width="554" caption="Default swaps on Greek and Portuguese debt are higher than they were at market bottoms in the spring of 2009."][/caption]

If the bailout comes, it will establish a solid trend of central banks around the world  of printing money to put out fires, which may well reinforce the Austrian school's economic theory that this global crisis will come to an end with showers of money and hyperinflation.

But traders will like it! judging by today's initial reaction, markets could rush straight back into the bull mode on any sign of a bailout of Greece. Can we say it now? Can I call it the Baklava Bailout? Get ready for dessert!

[caption id="attachment_1061" align="aligncenter" width="400" caption="Traders look like they are getting ready for a Greek dessert"][/caption]

Global investor Marc Faber is out with his new monthly Gloom, Boom, and Doom report (subscription -- highly advised) in which he analyzes the global debt problem and what it means for markets in the coming years. Most real financial crises are brought about by debt problems. And the financial system, especially in the United States, has been able to build up more and more debt -- as a total percentage of GDP -- over the years. Is there any mystery why we have been seeing more frequent and larger financial crises? Not really. It's because the investment banks, the powers that be, and governments around the world have allowed debt problems to build and spiral out of control. Marc Faber believes we're still not out of the woods because really nothing has changed with the creation of global debt and leverage. In fact, it may be getting worse. Even after the financial crisis of 2008, after lots of hand-wringing, government actions, meetings, popular discussions, and media analysis, nobody has done anything to stop the trajectory government debt. That means the financial problems have not been solved, and we're likely to have even bigger problems in the future. This was also the topic of a recent cover story in Forbes, the Global Debt Bomb.