There is no doubt a bubble forming in gold prices. In my opinion, the price of gold perfectly reflects the irrationality across many major markets, most notably, the equity markets. Despite no signs of inflation gold is up over 70% in the last year. As we’ve long opined, this is nothing more than the irrational money chasing that the Federal Reserve has once again created via their magically destructive printing press. The Fed is effectively forcing investors into risky assets as they give investors no other choice to support their retirement/income needs via their ZIRP. The price of gold has gone nearly parabolic in recent weeks and I would now classify gold as the riskiest of risky assets to own. This move down in the dollar and up in gold has come to epitomize the failure of Fed policy to reflate markets back to normality. As we’ve said before, there are only two outcomes from the Fed printing policy: more bubbles or utter failure. For now, it looks like we’re in store for the former and that means there are more busts in our future. I think monetary and fiscal policy are currently making our macro problems even worse, but how bad these problems become has yet to be seen.