Gold broke $1,000 this week, no surprise. It turns out that China wants to buy more gold, this will skew the price, no? Throw in "Indian Weddding Season" and September being an unusually bullish month for Gold and I'm not surprised with the price breach.
Where I have found amusement is that the equities and commodities have taken this information and twisted to mean a vote of no confidence in the Greenback. Oil is above $71, the S&P 500 is making new highs and the dollar is making new lows. One could argue that this makes a compelling case for inflation but they would be wrong.
First with unemployment at 10% and factory utilization at 60% there isn't demand, this acts as a kind of regulator on inflation.
Second, Consumer Credit is in Freefall the numbers from July came out and they were ugly. From the New York Times:
Consumers Won’t Borrow
The consumer credit numbers that came out Tuesday are impressive. It is not that the numbers fell for one month; these figures can be volatile. But it is that the numbers are coming down repeatedly. July was the sixth consecutive month that consumers as a group paid down what they owed rather than borrowing more. Since interest is accumulating every month, that is an impressive accomplishment.
Some of this is, no doubt, involuntary. But a lot of it is by choice. Credit markets have eased some this year, and of course financial markets have soared. But consumers are still hesitant.
Over those six months, here are the annual rates of change in various measures of consumer credit.
Seasonally adjusted
Total consumer credit: -7.1%
Revolving credit (credit cards): -10.2%
Nonrevolving consumer credit: -5.2%Not seasonally adjusted
Consumer credit held by commercial banks: -14.5%
Consumer credit held by finance companies: -12.1%
Consumer credit held by credit unions: 0%
Consumer credit held by federal government and Sallie Mae: +9.7%
Consumer credit held by savings institutions: -21.9%
Consumer credit held by nonfinancial businesses: -17.4%
Consumer credit held by pools of securitized assets: -5.5%
Total consumer credit is declining at the fastest rate since World War II. Revolving credit is falling at the fastest rate since counting began in 1968.
Given how overextended many people were, this should be viewed as good news, at least over the long run. This is probably not enough to quickly derail the economic recovery, which is based in large part on manufacturing and trade recovering from levels that were below even reduced demand. But consumer demand seems unlikely to provide the next leg up.(http://norris.blogs.nytimes.com/2009/09/09/consumers-wont-borrow/?hp)
And finally if the dollar is going to be toilet paper next year I would hope you would get a decent interest rate on any money you gave the government to hold but that just isn't happening. Bond sales are booming right now. From CNNMoney.com:
Long-term bonds jump ahead of auction
Prices for 30-year U.S. debt surge one point amid hints of foreign demand for Thursday's $12 billion offering and a drop in stocks.
NEW YORK (Reuters) -- Thirty-year U.S. Treasury bonds rose a point Thursday as a downturn in stock prices supported the bid for safe-haven government securities.
Ahead of the 30-year Treasury auction at 1 p.m. ET, there was also talk of foreign demand for the maturity.
"There's talk of foreign demand and stocks lost momentum," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York.
The 30-year bond climbed a point, its yield easing to 4.27% from 4.33% Wednesday.
The Treasury will sell $12 billion in 30-year bonds in a reopening of a previously sold issue. In when-issued trading, the 30-year yielded 4.284%. 
It may take a couple of days for the market to figure this all out, they're pretty bright guys over on Wall Street.....
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