Dollar's bouncing a bit, yet oil remains at record highs. Gold is consolidating, getting ready for its next move. Which way will it go?

Meanwhile, the DJIA has held my major support level at 12,795. Could stocks start to play catch up with other inflating assets? After all, US stocks in general have already been in one GIANT STEALTH BEAR market, losing more than 75% of their value in real terms in the last eight years. 

On a separate note, I received a question yesterday about the Great Depression and whether or not I thought the gold standard back then contributed to the depression. My answer: Absolutely! The gold standard prevented Washington from pumping out money and credit. They were handcuffed by the gold standard. 

Today, they are no longer tied down by a gold standard. So they are free to create money and credit at will. That does not mean we can't have a depression. It merely means that instead of if it being a deflationary depression, it would be the opposite, an inflationary depression. 

Comments?

Wild markets, eh? Currencies swinging like crazy, gold gyrating, roller-coaster moves in the grains. And the Dow Jones can’t figure out whether it’s coming or going.

No problem! If you’re a seasoned trader and investor like me, wild swings can make you a fortune. Quick in and out trading. Gotta love it!

But real wealth is accumulated on the longer-term trends. Right now, for instance, keep your eye on gold. If it holds support at the previous low of $846.50, on any dip Buy, BUY, BUY!

Also, very important, China’s stock markets are pulling back right now, after having gained 22% in three weeks. It’s just a pullback -- and a great way to position yourself for the coming new bull leg up in China.

I like the FTSE/Xinhua China 25 Exchange-Traded Fund (FXI) the best. I would buy it right here, at 153 and change.

Yes, that’s right. That’s what I’m forecasting. Phase II of the natural resource and commodity boom is about to begin. And it will be the most powerful surge higher yet.

How do I know? I won’t go into all the details of my trading and forecasting models, but I will support this with a fundamental argument that I think every investor should be thinking about right now. Hardly anyone is talking about it, which makes it even that much more significant.

Let me pose it in terms of two scenarios and a couple of questions.

First, suppose, just for a moment, that the U.S. economy does not slump as badly as most expect, and instead, actually picks up some steam going ahead. Since Asian economies are still largely firing away on 12-cylinders, what to you think would happen to global growth -- and hence the natural resource markets -- if the U.S. economy springs back, even if it does so just slightly?

Demand for natural resources will go through the freaking roof, and natural resource prices along with it.

Now suppose that the U.S. economy instead of bouncing back, slumps even more. The Fed and Bernanke will print even more money, weakening the dollar even more.

What do you think would happen under that scenario? Inflation will pick up an even greater head of steam, and natural resource prices will take off yet again.

Sound like a “win-win” situation for the natural resource markets? It does to me!