Summary

• The reason for gold’s meteoric rise of the last ten years is clearly the fear of fiat currency’s demise, which is completely overblown.
• The price of gold should rise roughly along with inflation, not way beyond it. Ironically, gold is one of the most inflated items. Thus gold still needs to correct.
• With every anemic and failed rally in the gold price, the conviction of gold bugs gets more shaken.
• The pendulum that is gold mania should sooner or later swing to gold panic, creating an entry point for longs well under $1000 per ounce and perhaps closer to $500.
• Due to the above bullet points, shorting $1300/oz gold is not as risky as shorting normally would be.

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