NO market like a man is an island. Everything is connected and for gold to decline, ALL markets must be set up in the direction of capital flows. People always want to personalize things and attack the messenger rather than try to learn what makes the world tick.

Human emotion is always the dangerous element that MUST be minimized to achieve consistency. Hence, those who called for gold to rise to $30,000 failed to realize that cannot take place in a vacuum. Nor was it possible for the stock market to collapse when the crisis is located in the bond and debt markets. So let’s see – stocks collapse to 10 cents on the dollar because that is what they did in 1929, and to achieve that capital would have to flee to the bonds markets as a flight to quality and that means interest rates would have to go NEGATIVE?

Absolutely everything is connected. The decline in gold is part of an interlinked trend that also marked the rise in the dollar and the fall of the yen. The end of quantitative easing is the end of a lot of hype used to get gold going. The first QE program was announced by chairman Ben Bernanke in December 2008 when an ounce of gold cost only $837.50.

The Euro will crash and burn forcing the dollar even higher. Just look at this chart. The Euro initially fell to about 80 cents then rallied to $1.60. This effectively DOUBLED the international COST of all outstanding debt. This is why Greece cracked and the rest of Europe is unraveling. Politicians have wrongly used the rise in the Euro as proof they did the right thing as if it were a soccer score.

The G20 just pledged they would not engage in currency wars. They will. Quantitative easing in not just the USA, but in Japan is in effect contributing to the global trend that has impacted the currencies. Europe will see its “euro” demoralized. Politically, this will be seen by Europeans as now proof that their politicians are on the wrong road.

Ed Note: In this article HERE Martin adresses Why Cycles Work.

Austerity will give way to hold the Euro together.  We will go over these interconnected trends at the Princeton World Economic Conference on March 18-19th. Now that you are starting to see the interconnections, this conference will be one of the most important events on our agenda. Sorry – I cannot guarantee there will be another in 2013. Right now, this may be the last one for the United States.