Tyler Durden and I are "on the same page" as they say in Corporate America on virtually every issue except for two: the use of arrows on charts and the future price of gold. When ZH tweeted that the S&P futures were at the low of the day (LOD) I responded by tweeting that gold futures were at the low of the month. To which they attempted to counter with this chart, implying gold had nowhere to go but up as QEndless could only mean one thing - hyperinflation and a significantly higher gold price.
It's a nice thought, but it completely misses the point. All the market cares about is rates of change. It's not where you're at, it's where you're at relative to where you were. It's why politicians ask during election season "are you better of now than you were four years ago". It's why the QE bear asks, "aren't the gas prices higher than a year ago".
Just look at the charts (sans arrows)...
If you plot the price of gold on top of the Fed's balance sheet there does appear to be a strong correlation.
However this is not the correlation the market cares about. The market knows more QE is on the way. What the market is figuring out now that is sending the price of gold lower is the rate of QE relative to what was going on a year ago has slowed to a crawl.
Basically the price of gold is going through QE withdrawal. Idiots like Turd Ferguson can play on people's anti-American tendencies by endlessly regurgitating the "dollar is dead, hyperinflation is imminent" meme, but anyone who has the slightest grasp of economics and history knows one thing: the US Dollar's stability relative to other currencies is a matter of National Security and for that reason they're not going to debase it into oblivion. Maybe my next project should be adopting the AA meeting model for QE addicts. They're gonna need it.