I realize I run the risk of sounding like a broken record every week when I discuss precious metals, but given how important they are as a vehicle for protecting one's wealth in today's insane money-printing environment, it would be hypocritical, if not irresponsible, for me to pay attention to less important topics.

What's more, given the action in the metals sector last week and the current sentiment, we may be seeing the beginning of a turn higher, following the recent rejection of lower prices.

Granted, to feel like any real turn is at hand we would need to see aggressively higher prices pretty soon. 

Given that so many people have positioned themselves (both psychologically and financially) for gold to decline, we easily could get that jolt higher.

Consider it a hostile takeover

I have been involved in the investment business for more than three decades, and I don't believe I have ever seen an asset market (I'm speaking of the metals themselves, not the miners) become so hated when so little has changed and price damage has been so minor.

Yes, the world hated stocks at the bottom in 2008 and in 1982, but the environment was much different. People were scared to death in 2008. In 1982, they were pretty frightened and had alternatives, such as CDs and bonds with yields in double digits. Today, there is really no alternative to owning some gold, unless you happen to have the perfect inflation-protected business, which perhaps some do.

Yet gold is routinely scorned of late, laughed at and puked up, all while central banks are trying to double inflation to around 2% from the 1% or so they claim it is -- when in fact it is quite likely already 4% to 5%.

How anyone can forgo having exposure to precious metals to protect themselves from the eventual destruction of G-7 money is beyond my comprehension, but that is what markets do. They get you horribly negative on something at a moment in time when you should be wildly bullish about it, and vice versa. Note the attitude toward stocks in general right now. The latter should be sold and the former should be bought, yet people are doing the opposite, in size.

The optimist sees the inflation rate as only half-right

On the inflation-watch front, I believe that investors should be keeping an eye on Japan and Great Britain, as well as the United States. Money printing is a worldwide phenomenon. Thus, we may see a change in inflation psychology somewhere else before we see it here, and such a "sneak peek" may enable us to understand better how the process is likely to evolve in this go-round.

For the moment, however, it seems as though folks are totally sanguine. In the U.K., inflation expectations, as measured by five- and 10-year break-even rates, ticked up to 3.3% this week -- according to an article in the Financial Times headlined "Investors see rise in U.K. inflation" -- which is a level not seen since 2008. Having said that,  the 10-year gilts yield about 1.95% and are not all that far off their best levels.

They can't have it both ways

So the bond market is simultaneously suggesting that inflation is headed to 3.3%, but it is happy to accept a 2% coupon. I am certain the 3.3% expectation will turn out to be low, but that doesn't matter. At this point, bond investors are willing to accept a negative nominal rate, presumably because they believe that the rate of inflation implied by bond yields won't be hit, or that some other happy outcome will save the day.

As for Japan, yields there are hovering near all-time lows. This suggests the moral of the story is that, thus far, the power of money printing has pushed bond markets higher, while its consequences have not concerned enough people to matter.

The same is true in the U.S., where money printing has helped boost the stock market and the economy at the margin, with the latter perhaps looking even better due to faulty seasonal adjustments and assumptions. The combination has powered the Dow Jones Industrial Average ($INDU) and the Standard & Poor's 500 Index ($INX) to record highs. That has conspired to cause journalists to write all kinds of glowing stories about the U.S. stock market and economy and, by extension, the dollar.

In the perverse world of money printing, if you conjure enough paper, you can get all your asset markets to rally, along with the very currency you are debasing. It is a wonderful world, until it isn't. Think 2008 -- only worse.