some day, we may look back on march 18 as the day everything changed. investor sentiment shifted, and the inflation vs. deflation debate was laid to rest. we are going to see easy monetary policy, rampant inflation (or stagflation, take your pick) and the return of the bull market in gold, silver, and the rest of the commodities.

there has been plenty of evidence for a long time, but the de-leveraging of hedge funds that began last july had clouded the issue. still, the evidence has been there all along, beginning with the appointment of ben bernanke as chairman of the fed. then the m3 money supply figure disappeared, never to be reported again. the manipulation of gold and silver in new york and london became ever more blatant as premiums for physical bullion soared, and the us mint ran out of coins, and had to ration silver and gold eagles.

yesterday the fed announced that it would be buying 1.15 trillion of government securities over the next six months, and investors finally woke up. the govenment needs to sell bonds to finance a budget deficit that is projected at 1.75 billion, and will probably be even larger. even the chinese have had enough, and they can't possibly buy that many bonds even if they wanted to. so the fed will engage in quantitative easing, or the monetization of debt, which to put it bluntly means it create money out of thin air.

so on a day when gold and silver were getting pounded, below $900 and $12, respectively, the market turned abruptly, and both metals and mining shares ended broadly higher. today the rally continues, and while no market goes straight up, i expect many good days ahead. with every major government in the world cutting interest rates to near zero, fiat currency will provide no refuge from inflation, and the beneficiaries will be gold, silver, oil, and resource-based stocks.