As i mentioned in my last blog, Bernanke is a genius of its kind, but every man has his limits. To understand these limits, one has to understand the economic model we are within, which is not capitalism anymore.
Capitalism was something else, it was about human needs, supply and demand, irrelevant things for nowadays economy, which i call "keynesialism", an economic model, solely focused on employment of huge masses of idle population.
The model works like this, three cavemen sits idle while fourth collects grain and eat them. The other three would starve because they are incompetent and ignorant, like large masses, if left unchecked will revolt against the "system" and starve afterwards. To prevent this, i give one of them a wooden stick and say this stick carries magic. This is the bubble. The other two will immediately get jealous and while trying to get the stick, i advice another to make venusian statuettes from clay to trade it with the stick. Eventually the last one will agree to carry clay to statue maker to touch the magic wood for once. Voila! All employed now, producing nonsense goods but their enthusiasm will bend the grain collectors mind to think that objects are worth of his grain. No one starves.
Basicly the system works like this way. The goods you possess if used collectively and efficiently able to satisfy the whole world, twice, but since the system needs more jobs as population is soaring through infinity, new goods, services have to be invented and to make them profitable, more bubbles have to be inserted into the system. This will eventually cause a global hyperinflation, but this is not our issue here.
The thing is tapering can not start until the bubble created by Bernanke by manipulation of gold price inserted into US economy properly and the only sign for that is a reduction in unemployment. I believe tapering can start next month, if gold price reverses from 1390 ( 60 ->30 ->90 then down) as we already know unemployment steadily moving down.
But if gold climbs higher than 1400, like to 1450, it means us economy is still farting the bubble to elsewhere thus no tapering until next year. This scenario worries me, euro might surge to 1.42, which will be devastating to european countries and they might want to act. Voila, currency wars again. Japanese will follow them, then swiss, because all desperately need JOBS stolen from them by united states.
Or, maybe Bernanke tries to force them to act, to ease tapering efforts of an exhausted budget. Why not? Load off some bubble to off shore, make them taper u. This means bullish gold for some time.