Money… money… money.

Before you think I’ve gone off on an Abba kick, hear me out.

Thanks to the world’s central banks and their efforts to pump the global financial system with a ton of cash, the world is now awash with greenbacks, euros, pounds, and yen.

And I’m not talking billions here. I’m talking about trillions.

There’s no doubt that the U.S. economy needed to be bailed out of the mess it created for itself – and then spilled over into the world’s other economies, too. But this isn’t just a spare bit of cash stashed away for a rainy day – the numbers are staggering.

And the reason for this massive cash injection is simple: We’ve seen economic disasters before, just not on this scale.

Remember the good old days when Mexico failed, or Argentina defaulted, or even when Russia caved in?

Back then, in order to bail out our Second and Third World buddies, we were talking a few billion here, a few billion there… maybe one hundred billion at the most.

But times have changed – and it’s time for a different lesson in mathematics, as we get to see what happens when a First World (and that’s being generous these days) nation blows up spectacularly. It takes trillions.

And as we’re finding out, it’s good to have friends in low places.

Gold Needs Some Red Bull

Mark my words: The market did not capitulate. The G-7 did.

So if we’re looking for a silver lining in this mess, it’s that we still have friends. And all those times we bailed out Europe and Asia in the face of deafening criticism has proved to be money very well spent. They have now come to our aid – and indirectly, their own, too.

This is exactly why the dollar hasn’t collapsed. When all currencies inflate in unison, what’s left to get smashed?

But the most bizarre thing among the current situation is that gold – the financial world’s tried-and-tested safe haven for troubled times – is acting like it couldn’t care less about what’s happening.

It’s astounding. Either this is the single best opportunity to buy gold and gold stocks, or we may as well put the “gold is a great safe haven” story to rest permanently. One would think that investing in gold would be a no-brainer at the present time, but it’s been tricky, to say the least.

Because of the massive disconnect between gold prices and gold share prices, I’ve been accumulating gold shares in recent weeks. And so far, the tactic has failed.

So why it is that the one time in modern history that the entire global financial system is on the verge of meltdown, gold can’t even break $300? (That’s $300 in inflation-adjusted terms).

Gold Appears To Be Kissing Goodbye To Logic

Heck, gold was really even higher by a factor of three in the early 1980s than it is today.

Logically, gold should be trading at $3,000 an ounce today. But sometimes, logic doesn’t matter one little bit – and the metal just isn’t doing that right now. Nevertheless, hope springs eternal for gold bugs – and this time, I think they’ll be right on the money.

Amid all the fear and panic, this market will eventually stabilize again and we’ll go through a harsh recessionary cycle. After all, business is business. But the long-term outlook for gold just got really, really shiny.

Many people were surprised to see the stock market take off on Monday. But the jump higher – over 10% across the board – was predictable. In fact, not only did I touch on it last week, but in one of my trading services, we even took a bullish position on the Nasdaq a few days ago.

Don’t get carried away, though… we should retest the recent lows again in the coming days or weeks.

However, if that holds, we could be in for a sustained rally.

If you need an indicator, just take a look at the CBOE Volatility Index (VIX), which (as the name suggests) measures market volatility and fear. Having hit all-time highs over 70 at the height of the crash, it has since lost 20%. This is a sign that stability is returning.

Nothing Says “Happy Holidays!” Like Gold

Remember… the market always anticipates the future. So while the economy may be heading south for a while, and the Grinch will doubtlessly be making multiple visits this holiday season, the market has already discounted this to some extent.

If you need any proof, just take a look at any well-diversified portfolio. Mark my words: It will be down over 20%, and probably more.

But with gold, Christmas has come early. You’ll know what to expect when the market retests its low – and if you see the VIX jump to over 65, let that gold bug roam free! If you’re looking for a place to put some of your overvalued cash right now, consider buying some shares of your favorite miner – it’s on sale.

Karim Rahemtulla
Smart Profits Report