| Inflation is becoming a real concern… at least enough in the eye of the public that Bernanke moved from the comfort of being behind the camera, to being in front of it… I won’t bore you with the significance of this, but we all know it’s something it has never been done in the history of the Federal Reserve. Obviously, Benny recognizes the public is fearing inflation… and perhaps his ‘internal’ inflation numbers – you know, the numbers he doesn’t share with the public – are really unsettling. Don’t get me wrong here, but I’m just about a certain as I’ve ever been in my life, that inflation over the next 10 years, will be the worst we’ve seen in the 80+ year history of the Federal Reserve. But it’s not going to happen overnight. You see, generally when the public fears something, they’re either too early, or too late to make any money on it. And I think that’s where we are with inflation right now. Um… commodities are already up hundreds of percent Mr. Public, why are you just now taking interest? I’ll give you an example. Back in 2008, when gold/stocks/and just about anything with a quote was crashing to new lows daily. As this was happening, I made it a point to stock up on some more gold, I think it was about $750/oz when I did that buying. But if you recall, that was when the public was selling. The public was selling, and I was buying – getting the picture here? Now… I’ve been actively buying gold and silver since 2003, but since then, the only other time I’ve really added to my position was in 2008 during the liquidity crisis. And I’ve never really thought about selling until recently. Let me explain… I spent some time in Denver a few weeks ago… strolling down a popular food and dining area enjoying a cigar. As I was walking down the street, I couldn’t help but eaves drop on the conversation between two college aged guys. The first words I heard was ‘the dollar is dead.’ One of them went on to convince the other that the dollar would fall off the face of the earth at any moment (and it very well could), but generally when you hear stuff like this from the public, it’s because they’ve been brain washed by the media. And I think that’s where we are today. It reminds me of the type of conversations you’d hear on the streets in 1999, when Internet stocks were doubling every day. This is the same kind of euphoria we’re seeing in the commodity markets today. If you get nothing else from my little rant here, get this, NOW IS NOT THE TIME TO BE BUYING! Gold/Oil/Silver/Coffee/Sugar are all up 2,3,4, even 5 fold over the last two years. Things area heated up here… and they need some time to cool down. Gold/Silver/Oil/Coffee/Sugar will all be much higher 10 years from today, but before we go higher, a correction is the highest probability scenario. If you are one of my paid subscribers, you’ll recall I first told you to buy commodities at the start of 2010 in the annual review I provide in this newsletter each year. Today however, I’m telling not telling you to short commodities, but to lighten the load. You still want to own some for the long run (as insurance), and perhaps even for the short run, but there’s some risk in being long here – the easy money has been made. We’re extended, and markets tend to correct when they become extended. That’s not to say we can’t double again from here, but it’s more likely gold and silver will fall 30%-50%. And stocks will likely follow. Remember, trading is about avoiding risk, and there’s risk being too long in the commodity markets right here. For what it’s worth… Brian Heyliger
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