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...real money burst out of its chains Richard Russell Dow Theory Letters Sep 1, 2003 Extracted from the Aug 29, 2003 issue of Richard's Remarks We've got a real, bonafide, primary bull market in one area, and that area is gold. On March 11 gold hit its high relative to HUI (representative of gold shares), and since March 11 the gold shares have outperformed gold, the metal. This has continued right up to today. We know that relative strength between the metal and the stocks alternates. First the stocks are stronger, then the metal is stronger, and then the stocks are stronger. Since March 11 the gold stocks have been stronger than the metal. That's bound to change somewhere ahead, but when it will change I have no idea, no inkling. When it changes on a trend basis, you, my beloved subscribers, will be the first to know. So put it this way, gold is now behind the stocks, and somewhere ahead this will change. However, you should remember that gold is safer than gold stocks because a lot can go wrong with a stock, while only two things can go wrong with gold coins. What are the two things? Gold can go down in terms of paper currencies. The second bad turn of events is that someone can steal your coins. Here's a P&F chart of HUI, and you can see that it's in a powerful primary advance. Is the advance too steep? I don't know nor does anyone else (regardless of what they may tell you). A primary bull market is like the Bible's description of the wind. "The wind goeth where it listeth," (translation, the wind goes where it wants to go). And so does a bull market. Remember, gold has been held back for years. While the Fed was creating multi-billions of junk dollars, gold languished. Worse, gold was denigrated, stomped on, spat upon, hated by the great central banks of the world. But since gold or real money is the "truth" and Federal Reserve Notes of dollars are a "fantasy lie," it was only a matter of time until the truth emerged, meaning that real money burst out of its chains. Gold shares are leveraged since as gold rises. At each individual mine, the cost of mining gold remains fairly stable. Thus, as the price of their product rises, a mine's profits rise exponentially. This in turn means that as the price of gold works higher the gold stocks will tend to outpace the metal. Subscribers who have accumulated gold shares as I suggested they do, now must have attractive paper profits. In fact, many of you may have almost obscene profits. For this reason, it just might be time for the gold stocks to take a "time out." That doesn't have to happen, but it's a thought. I'm asked where I think the gold bull market is going? And my answer is two-fold. My first answer is that I haven't any idea where the gold bull market is going. A basic thesis of Dow Theory is that neither the duration nor the extent of a primary movement can be predicted in advance. The second part of my answer is this -- My experience with most bull and bear markets is that they will go farther than anyone thinks possible. And that's all I have to say about the primary bull market in gold, at least that all I have to say about it -- today. More follows for subscribers . . . Richard Russell Dow Theory Letters © Copyright 2003 Dow Theory Letters, Inc 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). Do go for the trial. I think that once you read Russell, you will sign up permanently. There is a reason he's been around for 45 continuous years. Bob Moriarty Publisher 321Gold _________________ 321gold Inc ref: 8692