If all of the smart money available is sitting on the short side and nobody on the long side, except for a small group playing the futures, then the vast majority of players can actually be burnt right out of their positions. The longer it goes on, then the bear market players will literally be left without a single red cent to gamble against a market decline.

So the obvious here is to burn out the shorts. As opposed to gold markets, where the action is to burn out the longs. An interesting market dynamic is occurring to say the least.

If we are at a top, then it will be a long rollover, or we can look forward to another three months of rally.

Having just has a good laugh at the intraday charts for Ag and Au (use Kitco for the three-daz overlay) with the purely coincidental drop in the last minutes of NY trading, this comment about mario cavolo”s comment.

Mario writes:
“than 20,000 middle class Americans who were making $50,000/year”

Your comment is surely correct on its point, but alas, $50.000 p.a. salary is NOT middle class anymore, and has not been for a while.
Middle class means (or better meant) that you could afford certain things, such as ensuring the betterment of your kids by funding their education and also your own future, along with some perks.

Back about 20-30 years ago, a middle class family, whether one earner or more could:
a) afford a home and expect it to be debt-free at some point, with an increase in value keeping up with inflation
b) send the kids to those colleges they qualify for on ones own income
c) save for retirement
d) have a 1-2 week vacation once or twice per year for skiing or the or the ocean.
e) pay a property tax burden without fretting over it being a substantial part of ones income.

There are some others I left out.
But on 50k these dayz? No way, that is tough even if one does not live in the North East or CA.

Fact is, our conceptions of what is middle class have not kept up with reality. Pols like Obama can talk about socking it to the rich with extra taxes, and when they then define what the rich are, they bandy about amounts like 150,000-250,000, with no one objecting that that is not rich or wealthy.

Per the Minnesota Feds inflation calculator:
50k in 1980 equates to 130k today.
19.5K in 1980 equates to 50k today.

This is without going to John William’s website, and rather using the B(L)S or other official data. Using the real number at shadowstats only makes the point much more stark.

Back in the early 80s 50k would have been considered middle class and done what I point out above, and also perhaps the next couple of years.
I don’t remember people back then calling <20k p.a. as middle class.
TV helps: While the Cosby lifestyle was at the upper- middle class level (a lawyer and a doctor with house-personnel and an NYC townhouse), it was presented as part of the middle-class, not of the wealthy elite.

We need to disabuse ourselves of these long-held markers which have disappeard long ago on real reflection.
Today one needs a substantial six-figure income to be middle class in the way that that was used in the past.

Let the games begin. Remindful of Hollywood accounting, after paying for the artwork, dining clubs, private jets and 1000 economists who did not predict sunrise they have $45 B left over for the Treasury? Profligate usury cannot be good for the USA Economy…

Federal Reserve Made Record Profit in 2009: Report
FEDERAL RESERVE, FED, PROFIT, BANK, BANKING, QUANTITATIVE EASING, PRINTING MONEY, BERNANKE, ECONOMY, INTEREST RATE
Reuters
| 12 Jan 2010 | 04:05 AM ET

The U.S. Federal Reserve made record profits in 2009 and will return $45 billion to the U.S. Treasury, after its efforts to prop up the economy created a windfall for the government, the Washington Post reported.

The $45 billion reflects the highest earnings in the 96-year history of the U.S. central bank, the newspaper reported on its website late on Monday. The figure was obtained by calculations based on public documents, the Post said.

The Fed funds itself from its own operations and returns its profits to the Treasury. The largest previous refund to the Treasury was $34.6 billion in 2007, the Post said.

The report said much of the Fed’s higher earnings were sparked by the central bank’s aggressive program of buying bonds to push interest rates down and stimulate growth.

“By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier,” the newspaper reported. It said interest income on the investments was a major source of Fed profits.

The central bank also made money on its emergency loans and on special programs to prop up lending.

Even though it had reported billions of dollars of decline in the value of loans made to bail out investment bank Bear Stearns and insurer American International Group, the Fed received $4.7 billion in interest payments from those loans in 2009, the Post said.

The report said the Fed was due to release its estimate of 2009 earnings on Tuesday.
# Slideshow: Central Banker Report Cards
Copyright 2010 Reuters. Click for restrictions.

URL: http://www.cnbc.com/id/34818508/

IF the previous two years’ analogous price moves are any indication of how the gold price should progress going forward, then we have approximately a three month’s rally in front of us, out until April. But that may also imply that much in the way of the markets will continue in the same vein for about the same time period.

Weekly Analogous Gold Chart

http://tinyurl.com/yhc34r6