But the most pernicious part of being an addict is that it takes more and more of the substance to achieve the desired result. Global economies have become a bunch of debt addicts and governments are finding it necessary to constantly lower borrowing costs in order to force more loans onto the debt-disabled public and private sectors.

Those who are still making short calls on gold — expecting that it will fall further — fail to understand that negative nominal rates coupled with rising inflation expectations are the rocket fuel for gold — especially since central banks are trapped in this vortex of persistently reducing the value of their currencies vis a vis their trading partners. Even our Federal Reserve found it necessary to renege on its plan to raise rates four times this year after the markets fell apart in January.

But from this folly, there is no end. The intervention of central banks in the capital markets has become so extreme that they are now incapable of selling their securities and fighting inflation without sending equities and bond prices crashing. In effect, the inevitable binary outcomes have now become intractable inflation or depression. This is the real reason why the bull market in precious metals has just begun.

Meanwhile, uncertainty created by growing tensions between the U.S. and Russia and China, and terror attacks like the ones we saw Tuesday in Brussels, will drive more investors to the relative stability found in gold. That just solidifies the argument for gold going higher.