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I like gold. Listen...

Richard Russell snippet
Dow Theory Letters
March 14, 2006

Extracted from the March 13, 2006 edition of Richard's Remarks

March 13, 2006 -- Gold -- I like gold because it gives me a sense of security. Listen, despite the low stock market volatility, despite the fact that investors don't think there's any risk ahead, plenty of bad things can or could happen. I could list them all day long. A few -- extremists could blow up a few oil pipe lines. There could be another 9/11 type attack. A nuclear bomb could be set off somewhere in the US. The administration could continue doing dumb things and could get this nation into even deeper into trouble. The US could sink into deflation. US consumers could start cutting back on their buying, and we could have a world recession. A plague could hit the world including the US -- bird flu maybe?

Aw, I don't want to present a "horror list," but one other thought comes to mind. This is the only time in US history when two generations have gone by and none of these lucky people have ever seen what I call hard times. Can this continue? Sure it can, but frankly, I'll be surprised if it happens.

At any rate, as subscribers know, I think the whole central bank, fiat paper system is a fraud, and frauds ultimately fall apart. Remember, there's nothing behind the dollars you and I work for -- except the promises of the US government to pay. And if the dollar runs into trouble, what would the US government back the dollar with? What would the US government pay its debt with? Easy -- just more dollars.

But there is one money that is outside our fraudulent central bank system. That money is gold. The Fed can implode tomorrow, the world can sink into the dark ages, Air Force One can run out of gas over Washington, but gold will still be, will always be -- wealth. The Fed insists that it is creating wealth. The big lie continues, but only those of us who have lived 50. 60, 70, 80 years remember what prices used to be and what they are today. Yes, the dollar buys anything and almost everything today -- but what will it buy next year and five years from now? One word -- less. And 20 or 30 or less years out what will the dollar buy? Possibly nothing, because a new system will have be installed. Frauds don't work forever.

Gold technical position. I show GLD, the gold ETF which is worth one-tenth of an ounce of gold. It looks to me as though there is strong support for gold at 544 (April gold closed at 547.50 today). Gold is still far above its (red) 200-day moving average. MACD is down in the area of its November correction low. Meanwhile, the full stochastics declined to just below 20 and could be turning up again. At the bottom of the chart we see the 12-day rate-of-change turning up from a low above its February 16 low, which is good action.

lots more follows for subscribers...

Mar 13, 2006
Richard Russell
website: Dow Theory Letters
email: Dow Theory Letters

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