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The Big Picture Richard Russell Dow Theory Letters Oct 16, 2003 Extracted from the Oct 15, 2003 issue of Richard's Remarks Gold --Now here's the irony, and the markets, of course, always provide us with irony. The safest long-term investment today, in my opinion, is GOLD BULLION IN THE FORM OF GOLD COINS. This is the "rich man's preferred investment." Why do I call it that? I call it that because gold pays no income, and the average investor needs income. So gold coins are most favorable for the rich man, the man who doesn't need income -- or for the brave, who can forego the income. Why do I pick gold bullion in the form of gold coins? I pick gold coins because they represent timeless, totally safe wealth. The world is loaded with debt. The world is creating debts by the second, by the minute, by the day. All these debts must be either paid off or translated into bankruptcies. If they are paid off, they will be paid off by additional money created by central banks, and that's clearly inflationary. Thus the big picture is a global decline in the purchasing power of paper currencies. Since gold can't be mined as fast as paper currencies are created, the ratio of real money, gold, to paper currencies, spins up and off into the wild blue yonder. Ultimately, when holders of paper realize the swindle that they've been caught in, there'll be a panic to transfer their paper "wealth" to real money. That when the panic for gold will begin. How about gold here? The chart below tells the story. Note MACD at the bottom of the chart. Gold is in a corrective phase here, but so far gold and the gold shares are holding fairly well. My guess is that the corrective phase could last until December, and by that time gold will be "sold out" as will be the gold stocks. I also believe that gold is being accumulated at this time by knowledgeable, long-term minded investors. They don't care whether bullion is selling at 360 or 390, they are building their positions. The best time to buy more gold may be around December, but nothing is sure and thus I note buying of both gold and gold shares even now in the face of the corrective process. The two moving averages that you see on the chart are the 50-day and the 200-day. The 50-day MA for December gold stands today at 373.50. The 200-day MA stands at 357.60. If December gold can stay above or even very close to its 50-day MA between now and December, it will be showing outstanding strength. As I write Dec. gold is trading at 374.50, a dollar above its 50-day MA. More follows for subscribers . . . Richard Russell Dow Theory Letters © Copyright 2003 Dow Theory Letters, Inc Richard Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business. He offers a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $250, tax deductible if ordered through your business). _________________ 321gold Inc ref: 9289