“I continue to think that this bull market will end in an upside explosion.  I believe it is fated to go higher than anybody now believes.  A wise move here might be buy the farthest out calls as possible on the thesis that the sellers are convinced they will never be hit.  Wise heads are now warning that this market has now passed all sane appraisals, and as such it is highly dangerous.  Nevertheless I believe that this market is fated to go higher than even the most bullish practitioners can conceive. 

Reading my favorite advisories, they are overwhelmingly bearish, from the standpoint of the usual technicals, including the margin accounts, and the number of bullish advisories vs. the thin bears.  All this aside, my instinct tells me that the stock market is heading into the clouds … I sense that the retail public is moving toward an extreme of bullishness, and that all negative indications will be swept aside.  This bull market will not end with the usual and obvious technical indications.  It will end with an extreme of bullishness from the crowd.  

I note that talk about debt has simmered down.  The US debt is so huge that reasonable talk about it is almost impossible.  I believe in the end the US will turn to hyperinflation in its effort to minimize the debt.  The debt is now so huge that I believe there are only two possible outcomes: default or hyperinflation.  With the advent of hyperinflation, gold will come into its own.  In the end, those who have been patient enough to hold bullion will be rewarded.  Ultimately, a new monetary system will come into being, and its core will be built around gold.  I think it may be three to five years before this country moves into hyperinflation, but the only alternative is default.

The government will attempt to diminish our debt by way of printing, to the point of hyperinflation … The miracle of inflation diminishes the power of debt over time.  In the face of America’s unbelievable debt, prepare for inflation, rising inflation and finally hyperinflation … For a period of this third phase, speculative positions in the DIAs should be profitable, but only for a short while.  In the meantime, position in gold bullion and gold items should be held.”