Cash Better Than Gold!

Gold prices are retreating. Investors are raising cash, lots of them. We raised some back in May and June, but not nearly enough.

Long rate is heading down. This is in stark contrast to the market expectation at the beginning of the year.

There is one important thing that the markets across asset classes agree on: risky asset prices are heading lower. We're headed to a deflationary environment. And that has been baked into the market expectations, which may become self-fulfilling.

Cash not only will not lose value, it will buy more if you just wait.

Companies, big and small, are holding back. Because they can buy more later.

People who worry about losing jobs don't want to buy homes now. Mortgage rates can't help but to go down. People who have stable jobs are probably better off renting, because they can buy more home later.

Is there value in gold? Not in a deflationary environment and major governments are pursuing austerity.

There is only one entity that can turn this vicious cycle around: The Bernanke Fed.