Time is slipping away (busy busy busy), so let me put my finger on the single biggest mistake I think I made regarding my January 23rd call for gold to break $1000 by the summer.

First, let me give myself a break. At the time of the call, gold was about $878 (I'm just eyeballing the charts from Kitco, so I might be off a bit). Right now, gold is trading at about $942, using the same metric (London Fix).

So that means I was calling for an increase of (122/878)= about 14% over five months, which (normally) is a fairly aggressive call, especially when most "experts" were worrying about massive, 1930s-style deflation in January.

Instead of getting the 14% in five months, instead gold only went up about half that, i.e. a little more than 7%. So that was still a strong move, especially in the context of plenty of people warning of terrible deflation.

Nonetheless, I foolishly said that if gold didn't break $1,000 by summer, then I didn't know what I was talking about. What happened is that I really thought gold would be much higher than $1,000 by now, and so I (thought) I was building in a big cushion by only saying $1,000.

Looking back, I can reconstruct what I believe was my downfall: At the time, there were analysts and even some Congresspeople who were criticizing the banks for sitting on all of the TARP money and Fed-related bailouts. The idea was, "Why are we giving you hundreds of billions, if you're not going to start making new loans?"

So I was confident that those excess reserves would soon be flowing into the hands of the public, and that broader monetary aggregates like M1 and M2 would be growing rapidly through the first half of 2009.

I was (of course) wrong. For some reason, I actually took the politicians seriously when they said they were going to do something to "fix" the economy (i.e. pressure banks to lend out reserves).