By Deepcaster

There is no practical way that QE can cease here or in Euroland without a total and final collapse of the financial system.

The Federal Reserve Really Has No Practical Option To End QE

Jim Sinclair, jsmineset.com, 1/3/2013

The five year chart of the CRB Index (a Broad Measure of Commodities Prices) shows three descending tops, which is suggestive of Deflation. But to conclude that Deflation is likely to be The Ruling Force in the Economy in 2013 would be a Dangerous Error.

Indeed, it is critically important for Investors to understand whether or not we are in an Inflation or Deflation, or both (we later explain how this is possible). Failure to understand The Reality about Deflation and Inflation is likely lead to poor or even lethal Investment decisions.

Here we explain The Inflation/Deflation Reality and indicate how to Profit.

Indeed, Contrary Anecdotal Evidence from Increasing Food and Energy prices which many of us have encountered in recent years suggests we are in a serious Inflation.

But how do we reconcile that fact with the CRB chart above which shows a series of lower lows in recent months and the 5-year Chart of Dr. Copper, the Premier Indicator of Economic activity, which also appears to be Topping and apparently ready to Deflate.

But if one takes a look at the very recent CCI numbers or at Inflation since, say, 1930 (immediately pre-Depression) one gets a very Different view. They indicate ongoing Price Inflation.

The Solution to the Inflation/Deflation Conundrum is to consider whether there is Inflation or Deflation on a Sector by Sector basis. When one does this, one finds some Sectors are clearly Inflating and others Deflating. but that the overall Net Effect is Inflation (see below).

Check out the chart of the Continuous Commodity Index or CCI and note that it has managed to put in a weekly close above the 38.2% Fibonacci Retracement Level of the move lower from its all time recent high made last year. If the market pysche remains the same, look for this index to now make an eventual run back towards the 597-600 level.

We can look at these charts as subjects of interest to us as traders/investors but what this particular stock represents is increasing pain for consumers and the hard-pressed middle class in one of the worst, if not the worst recovery since the Great Depression.

Think of this as increased frustration at the grocery store, at the gas pump, at the hardware store, at the local restaurant, etc. While some of this rally is the result of the drought and I will of course not lay that at the feet of the Fed, it is a simple fact that the breakout on this chart today, is the DIRECT RESULT of Mr. Bernanke’s insistence on implying that another round of bond buying is on the way.

When you pull into the gas station and fill up your car or truck, and are sent reeling at the cost, you can lay some of the blame right at his feet and the feet of his elitists on the FOMC who insist on pacifying Wall Street instead of having concerns how their policies are destroying Main Street.

More Pain for the Middle Class courtesy of Bernanke

Dan Norcini, traderdannorcini.com, 8/31/2012

It is not just the skyrocketing prices we pay for Food and Energy as reflected in the CCI, that demonstrate the Price -Inflationary effect of The Feds (and ECBs) ongoing Monetary Inflation. But it is the prices for most of what we buy that have skyrocketed as a result of The Feds decades-long Monetary Inflation. Consider the following chart comparing the 1930s cost in the U.S. for common goods and services, with todays costs in Purchasing-Power-Degraded Dollars.