Here they are, with some recent editorial additions to illustrate my point:

"Precious metals bulls were extraordinarily frustrated late in 2011 -- and 2012 -- I'm sure, as gold and silver were sold regardless of the news. Certainly markets can be maddening (as well as unprofitable) at times, especially at the end of the year when forced selling (in some years, it is herd-driven forced buying) causes the markets to completely ignore favorable news, and sometimes that feeds on itself. Of course, when the trend in force is as powerful as the recent decline in gold was, I'm sure there were computerized trading programs jumping on the bandwagon as well, and betting on lower prices by getting short.

"In any event, as the year ended, the stage was set for a potent rally in the metals, and that was what I think we saw start on Tuesday -- or Wednesday, in this year's case. The questions now are whether the last week of December was the low for this entire decline, and will we get some sort of test of those prices (as well as what such a test might look like)."

With last year in the rearview mirror, we can now answer the last two questions, as gold fell slightly below the December 2011 lows in May 2012. Still, I found it noteworthy that the same sort of scenario with regard to the gold market I described a year ago seems to be happening again, even down to shorts getting squeezed.

For all the money unleashed by the world's printing presses that is now sloshing around, it is easy to forget that we still have not solved any of our fiscal problems. Thus, from that perspective, it makes a perverted kind of sense that a tiny slice of history may be repeating itself.

Witness the disgusting soap opera over the misnamed "fiscal cliff," which finally ended on New Year's Day with tax hikes (mostly aimed at the so-called 1%), and next to nothing in spending cuts. In others words, it was about what I had suggested might occur after we saw the election results. The economic impact is still going to be negative, as the restored payroll tax will affect consumer spending.

It probably won't be a cliffhanger

Congress and the administration are a total embarrassment, as this entire exercise has been about posturing rather than dealing with any real issues. Even worse, we are going to see this same sorry movie again as we approach the debt-ceiling debate in a few weeks, since it is extremely unlikely that anything of consequence will be done until that deadline is fast upon us.

Given how lame our legislators are, I don't expect much to come from that either. It is going to take a full-blown funding crisis to get us on the right track, with the government unable to sell bonds to finance its debt. This assumes we won't have gone too far down the road toward European-style socialism to regain that right track before the bond market takes matters into its own hands.

Though it is just a guess and a theory at this point, I do think we will see bonds roughed up in 2013, and perhaps the funding crisis could even hit this year. But as I say, that is just a wild-eyed guess on my part. I do have a rationale for believing it, which I have shared in the past, that being the fact that the world's central banks are printing money so recklessly it is virtually impossible to see how folks can continue to believe in deflation (though I am sure those who feel they have been cheated out of deflation still expect it).

Don't call it a comeback

As they were at the end of 2011, the metals obviously have been under pressure and mining stocks have been even worse, as somehow folks have concluded that the world's central banks are going to magically thread the needle with their money printing, even though they haven't gotten anything right for decades. I find the whole concept laughable, but that is where we are.

Gold has basically been correcting since the highs of September 2011, when it began selling off because QE3 -- a third phase of quantitative easing, or money printing by the Fed -- didn't commence. Now here we are with QE3 and QE4 being administrated in basically unlimited fashion, combined with money printing the world over, yet gold has not yet gotten back to those highs.

That suggests that gold might have gotten ahead of itself in 2011, but that given the developments since, once folks again become convinced of the need to own it, the price is likely to head substantially higher.