 The Waiting
Game
Richard Russell snippet
Dow Theory Letters
August 16, 2004
Extracted
from the August 13, 2004 edition of Richard's Remarks
Gold -- I wrote a lot about
the gold situation yesterday. And I want subscribers to remember
that when we hold gold or gold shares we're playing "the
waiting game." The US and its overseas friends are also
playing a game. Americans have a secret name for this
game. It's called -- "We pretend to pay you with our worthless
paper dollars, and you send us your goods and pretend that you're
being paid."
So why do China
and the Asians continue this basically idiotic, losing game --
are they just stupid? No, they're not stupid, they simply want
to continue selling their goods to the US. You see, the leaders
of China and Asia have a problem. It's called keeping the masses
employed. The Asian leaders' problem is to see that hundreds
of millions of their people have jobs. China, for instance, has
TEN million people coming into the work-force every year. If
these people can't get jobs, well, there's always the possibility
of revolution.
So the game
goes on. It will go on until the US sinks under an ocean of liabilities
and debts and our foreign "partners" will no longer
accept dollars. But no one knows exactly when that time will
come. Next month, next year, three years from now? The signal
for the fall could be a collapsing dollar. Or maybe we're getting
the first hints of the fall now -- with the stock market heading
down along with the dollar (the dollar got whacked big time today).
The smart boys
like Warren Buffett see the writing on the wall, and they have
taken a multi-billion dollar position in foreign currencies.
But foreign currencies are still junk paper, they're just better-quality
junk than the dollar. In the end, the only time-tested,
intrinsic money is gold. But as I said, when you hold gold or
gold shares you're going to be right in the end -- but you're
also playing "the waiting game." And waiting can be
difficult, it can on occasions be scary, and it can certainly
try your patience.
This is what
the central banking system has done to us. This is what the Federal
Reserve is all about. This is the potential disaster that the
paper money system has inflicted on all of us. My wise old father
used to tell me during the Great Depression, "Dick,"
he'd say, "the only thing you can depend on in this world
is a good education and what's between your ears." I've
told my own kids the same thing. It's the God's honest truth.
Richard Russell
Dow Theory
Letters
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