Using the 1980s calculation for CPI, we are at 9-10% inflation as of 11/2012. Stimulus is everywhere, it seems, and energy will be slightly cheaper for the next 3-4+ years.
I suspect inflation, using the 1980s CPI calculation, will increase. Since we are still at negative real interest rates, this means gold will rise. Once we break $1900 on gold, I expect the masses to begin buying again, as they appear to prefer to buy at the elevated levels. This will likely draw new money into the gold stocks as well. Although, I have no clear way to determine estimates. Perhaps, this is what you are seeing in the posted chart.
The stock market will probably hit new highs as well. The comprehensive, fundamental economic indicators in the US are showing strength across the board. They have been showing strength for months.
With all of that said, the only negative things I can think of would involve war with Iran, a collapse of the Japanese economy, or Europe severely unraveling again. However, European interest rates on government bonds are way down from their highs. This suggests strengthening there. The DAX was up almost 25% last year.
Overall, the bias seems to lean bullish.
Any thoughts?
