The Troll Under The Bridge

There is an old comedy routine in the movies where one actor is asked to go for a ride in another's new car. The former becomes excited, dresses up nicely, slicks up his hair, and eventually hops into the car. The owner of the new vehicle drives up about 20 feet, then backs up and parks.
As gold and silver traders, that's a similar ride to the one we've taken. We became excited about tapering, hopped in the fed car and, except for a measly (!) $10 billion taper, we're back to square one. 
For months, even years now, money has been exiting the precious metals and other commodities to enter the equities markets, which began to catch fire just as QE3 began. In very broad macro terms this is because just before QE3 began, the U.S. began to claw out of the most serious depths of the recession. Stocks were gaining and the new money from quantitative easing was poured into the equities markets.
Overall, commodities have suffered greatly through the recovery portion of the recession. While there is some explanation for gold, there is much less for silver, the industrial metals and farm commodities. (It's not as if food is getting cheaper in the supermarket, is it?)
Yet, the chief aim of QE3 has been a little more multifarious than just buying back faltering financial assets.
First, it has to be acknowledged that those assets, if not exactly toxic, are beginning to glow in the dark a bit like bad meatloaf and the Fed felt it was crucial to maintain the financial industry's and the public's trust in banks, the banking process, mortgage lending and other types of lending. Sopping up these spoiled assets was the solution.
Secondly, hunching between the lines of almost every Fed statement or press release, its minutes, its members' public blurts in between meetings, there is a fear. The fear is of deflation, not inflation. If you review month after month all the Fed's expressions of conditions and outlooks, it is the one consistent nagger in there. It is like the troll under the bridge.
"A lot of gold investors are anticipating deflation not inflation as a result of the Fed announcement, taking advantage of the downside momentum and shorting gold at least temporarily," said Jeffrey Sica, chief investment officer of New Jersey-based Sica Wealth with over $1 billion in client assets.
Mr. Sica has a most serious point to make. And, with gold seemingly no longer a growth tool and absent the need for safe haven, we are waiting on inflation. Yet we got tapering.