This post is a guest contribution by Vitaliy N. Katsenelson*, author of Active Value Investing: Making Money in Range-Bound Markets and director of research at Investment Management Associates.

I often start my mornings with egg, cheese and turkey sandwich at Panera Bread. This morning was no different. While reading newspapers on my Kindle, sipping hazelnut coffee (I know I just lost respect of the true coffee drinkers), I started with yesterday’s FT, an article on China piqued my interest. China plays a very important role in the global economy and thus I pay close attention to it. I started reading:

“The benchmark one-year lending rate was cut by 27 basis points to 5.31 per cent, while the one-year deposit rate was lowered by the ...

GoldDrivers 2009 – Extraordinary Bullish Outlook for Gold

By: Eric Hommelberg ldSeek.com

Dollar topping out Physical demand skyrocketing Supply chain shutting down COMEX Gold Manipulation exposed Gold shares on the move again

It sure has been a brutal year for gold and its shares and many may wonder if the $1030 top clocked in March 2008 marked the top for the gold bull market that started in April 2001. Despite the fact that many analysts want you to believe that gold has failed to act as a

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Another currency rally….  SNB cuts another 50 BPS!  Budget Deficit continues to widen!  Treasury yields go south for the winter! And Now… Today’s Pfennig!Good day… And a Tub Thumpin’ Thursday to you! It’s been quite the rally this week in the currencies led by the euro, which is like old times, eh? The Big Dog on the porch finally gets to stretch its legs and chase the dollar down the street! It’s been a long time since we’ve seen this go on for more than a day. Yes, we’ve seen one day spikes, and even two day rallies turn into false dawns, but this one has lasted about a week now. Ever since last Friday’s awful Jobs Jamboree, the tide has turned, and the Trading Theme that has held the currencies in a full nelson since the end of July, could very well be on the way out the door.

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Since Ben Bernanke touted the dollar’s muscle in 2002, the greenback has fallen 40% against world currencies. This free report reveals what’s next for the greenback and four ways you can profit… Unraveling the future direction of the dollar has consistently made fools of economists and other financial gurus. But right now, if you closely examine the history and current economic tradewinds, the clouds begin to part. Fact is, the value of the dollar isn’t just some nebulous economic macrotrend. It has a dramatic effect on your everyday life. From the cost of food and gasoline, to interest rates on car and home loans, Americans deal with the impact of the incredible shrinking dollar in their businesses and daily lives. Knowing which way the dollar is headed can help your portfolio hum and let you sleep like a baby at night. The exclusive, free report reveals how ...

The spot price of gold has fallen more than 20% from its all-time high, reached in March of 2008. But if you think that means demand has declined, think again.

Gold demand has in fact exploded, and not just here and there. Everywhere. Around the world, customers have been queuing up to strip coin shops’ shelves bare. Mints have been running 24/7 and still have been forced to ration coin shipments to their dealers. ETF vaults are bulging.

Now, the World Gold Council has confirmed the trend with hard numbers for the third quarter of this year. In a page-and-a-half press release summarizing 3Q2008 activity, the WGC had to use the word “record” ten times. Some highlights:

Dollar demand for gold in Q3 was a record US$32 billion, 45% higher than the previous record, set in 2Q2008. Identifiable investment demand, which incorporates demand for gold through exchange-traded funds (ETFs), bars and coins, rose to ...

The outlook is bleak for retailers, says Adam Lass. As job losses mount, households are cutting back on all non-essential spending. And massive government bailouts won’t reach the high street in the near future. Adam says investors should continue to short the retail sector.

This from Taipan Daily:

We came, we saw, we ate too damn much.

(One of these days, I’ll ask my oldest daughter to translate that into Latin for me. She never did master the more common romance languages. But she’s the family whiz at Cicero and Caesar.)

The second phase of the “Great Annual Pig Out” (the first being the candy-fueled grotesquery that has swallowed All Hallows’ Eve and the third, the week-long debauchery that is Chanukah-Christmas-New Years) is now officially over and done with.

Under our belts, as it were.

We drove, we flew, heck, those who couldn’t avoid it might

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It takes time to correct the errors of a 25-year bull market, says Bill Bonner. There is a dark valley to cross before the market can climb again. But the Fed and Treasury continue to try and stop the correction process. Bill says all they are likely to do is cause some spectacular damage.

This from Daily Reckoning:

Financial markets are part of public life. As a consequence they follow the rules of all public spectacles. That is, they are one part rational and sensible… one part incomprehensible… and one part pure humbug. You never know exactly which part it is you’re looking at.

But the markets are also moral, not mechanical. That is, they follow moral rules, such as – Thou Shalt Buy Low and Sell High… Thou Shalt Save Thy Money… Thou Shalt Not Speculate Unless Thou Knowest Exactly What Thou Art Doing.

Break those commandments… and you’re

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Deflation is every central banker’s worst nightmare, says Justice Litle. That’s why the Fed is pumping huge sums of money into the financial system. But if none of that money moves around the economy, it won’t make much difference. And so more dollars will be printed. Justice says this strategy means either a return to inflation or an all-out collapse of the dollar-based monetary system. Either way, gold will skyrocket.

This from Taipan Daily:

Today I want to talk about the concept of monetary velocity. (I know, I know… monetary what? You’ll see the importance by the time we’re done.)

Let’s start with some background. In Wednesday’s Taipan Daily we noted that short-term interest rates have fallen to multi-year lows. The flip side of falling interest rates is rising bond prices. When bond prices rise, interest rates fall and vice versa.

This means investors

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“Deflation now, inflation later” is how Bill Bonner sees this crisis evolving. For now, US dollars protect you from falling asset values. But don’t get too attached: when the inflation bubble begins, the greenback will be tossed aside, and gold will fly.

More from Bill in The Daily Reckoning:

Deflation? What does that remind you of, dear reader?

Japan! Of course. This is the trend your editor saw coming 10 years too soon — a Japan-like slump.

“A deep and prolonged recession could raise the spectre of deflation of the sort that long plagued the Japanese economy,” says a fellow at the American Enterprise Institute.

“Welcome to Hiroshima, mon amour,” was how we put it, with Addison Wiggin, in our 2003 book, “Financial Reckoning Day.”

“If the United States were to repeat the Japanese experience, stocks could be expected to return to their 1995 trend line, with the Dow below

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Gold bug Ed Bugos is sure of a bright future for the precious metal. He says the only real obstacle to a gold bull run is full monetary (not asset) deflation. And the way the Fed is expanding credit, this seems like an unlikely scenario. Ed says this means a boom in gold mining is just around the corner.

More from Whiskey & Gunpowder:

There are only two things gold bulls should worry about from this point forward, now that the general commodity correction is out of the way and the froth has been worked out of the market: deflation in the strict sense of the term (monetary, not asset deflation) or a suddenly brightening economic outlook, both of which, in this writer’s opinion, would require a political austerity hardly imaginable these days.

As far as deflation goes, we saw that the Federal Reserve inflated its balance sheet by an astonishing U.S.$600

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