2 CHARTS, 2 INFLATIONARY BUBBLES

Have a look at some charts here. These are characteristic of tops.

Charts 1: Nasdaq ( set "time" to custom, then 3/17/1992 to 3/5/2000. Set "frequency to monthly)

http://bigcharts.marketwa...

Chart 2: Gold

http://futures.tradingcha...

This is a VERY short list of such examples.

Throughout history it is found that when EVERYONE comes to believe that a market has only one direction, that is the point at which major reversals begin. And at the beginning of major reverals, EVERYONE sees it as a buying oppurtunity. Virtually NO ONE sees a trend reversal coming, and fundamentals always support their vision of a continued trend. What few ever realize is that it is human emotion that drives the trend, not fundamentals. The emotion that drives the trend up is created FROM the fundamentals. Once EVERYONE has succumbed to the forces of emotion, then all buyers have bought, all money is invested. And without MORE money coming in, the trend collapses.

I believe, that due to the enormous amount of coverage that metals are getting, and the overwhelming belief that the price of gold has only one direction, that a major trend reversal is near. The majority of Fools ALWAYS buy near the top.

We will have Deflation, not inflation, and one (only one) of the reasons I say this is because virtually NO ONE expects it.