Quantitative easing, that I don’t really understand, is a reflating tool. I had to look up “reflating” this morning since Bill Gross used it in his latest Tweet. I’m sorry, Bill, I didn’t see how you “got it wrong” on the Barron’s Roundtable, but I forgive you, since I always felt anything I took away from watching one of those sessions was a worthless investing idea. Different opinions on relating/inflating/deflating are floating through the economic ether and no one can know for sure NOW which is right. Will reflating be inflationary in the bad sense of the word? It might be but who can be sure whether it will be good for the price of gold?

When I sit back and look up this is getting really complicated. Near term the United States and the dollar are riding high. Reflating is not likely to bring down either one. Long term the period of US ascendancy on the world stage is coming to an end. The buying power of the emerging world-wide middle class is likely to be inflationary with bumps and starts. There will be buying pressure on basic commodities, food, water and energy, but not necessarily on gold.

My conclusion from this thinking is that both near term and long term gold is not a “sure bet.” Until today my thinking was short, medium and even long term gold was not a good investment, but VERY long term it might be. Has this opinion changed? I’m not sure. Long term for sure basic commodities, food, water and energy would be good investments. They may also be good near term investments as smart money begins to seek them out.

Gold is likely to have a good “reflexive rebound.” Will this be a good time to get permanently out?