Everything continues to convulse in capital markets, including currencies, stocks, interest rates, and virtually all commodities. This continued volatility is still a settling of accounts for the major institutions that had spent their time speculating in all these sectors and are now having to readjust their portfolios. More time is needed for this volatility to play out.

I'm getting a lot of research lately predicting a resurgence of gold and oil prices. I believe in the inflation contagion argument with all the stimuli in the marketplace; however, I just can't seem to pull the trigger on considering new positions at this time.

It's a peculiar market environment when even the world's most stalwart place for risk aversion -- gold -- is dropping in value like a stone. I think investors aren't rushing to gold because the current crisis in capital markets and major economies is so global in nature that the risks to global economic growth are outweighing any other. That is to say that not even a major credit crisis can get investors to consider gold as a typical safe haven. Going to cash has been the only play.

So, this reality has created enormous price movements in what have traditionally been good investments in times of high risk. Investment research from a lot of brokers is now predicting a major resurgence in the price of gold and oil, commensurate with inflation.

The big question that I have now is: how or when will this predicted trend occur? I don't have the answer to this yet, especially when there is an equally valid argument for deflation. We are no doubt in a commodity correction and I think investors need to keep the price action in gold on the radar screen. This price action will be equally or more telling than price action in the stock market.

We're going back to the old days when investors wanted to invest in quality companies with a long track record of paying dividends. In the immediate term, however, we still have to get through the crisis of confidence.