Hang on to
your gold coins
Richard Russell snippet
Dow Theory Letters
Oct 8, 2008
October 7:
I've suggested over and over that subscribers move to cash (T-bills
and T-notes) and gold bullion. As for gold, I prefer one-ounce
gold coins held in your possession in your bank vault. I prefer
the actual possession of gold to a piece of paper stating that
you own a certain number of ounces of gold. I do not expect the
US government (as per 1933) to call in all privately-held gold,
but it would not surprise me to see the US government halt all
trading in gold.
Why would the government do that? Gold
is the enemy of fiat paper, and the Fed is going to print one
hell of a lot of Federal Reserve Notes. The coming deficits will
be staggering, and ultimately our overseas creditors may insist
on partaking of our gold hoard (as did DeGaulle) rather than
accepting an endless amount of fiat paper, which can be created
"out of thin air" by the Federal Reserve. I see a coming
battle of fiat paper vs. gold in the future, and gold (real Constitutional
money) will be the winner.
Gold
-- I see only two safe havens in this bear market. The first
is Treasury bills which are dependent on the viability of the
US dollar. Should a run on the dollar occur, the back-up would
be the only money which is not debt-created money -- gold. Thus,
a portfolio of say 80% T-bills or T-notes and 20% gold coins
seems to me to be our best protection against the bear and the
stupidity of government.
Below we see a weekly chart of gold.
MACD appears to have bottomed and is now heading higher. The
blue stochastics are about to enter positive territory above
zero.
Gold is pressing against the 50-week
moving average which now stands at 882. Dec. gold was at 886
this morning (Tues) before the opening of the market.
Hang on to your coins.
Richard Russell
website: Dow
Theory Letters
email: Dow Theory Letters
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