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Hold your gold!!!

Richard Russell snippet
Dow Theory Letters
Oct 16, 2008

...Close to three trillion dollars in debt, the "realistic" figure being put forth from economist Nouriel Roubini. The Fed will have to print an ocean of fiat currency to cover these debts, and if the dollar gets whacked by one of the myriad threats against it we will be adrift in that ocean of greenbacks.

Obama is sustaining a healthy lead over McCain, and tonight's debate might be McCain's last chance to show the public an economic dialectic that is convincing. The economy is killing McMaverick, with social issues the Republicans usually run on taking the back seat.

Consumer spending, which makes up 68% of the US GDP is falling precipitously -- this is very worrisome. The upper two-fifths of consumers purchase more than the combined spending of the other three-fifths. With Obama's tax increases taking effect in a receding economy, we could really see a drastic turnaround from the years of steadily increasing spending we've witnessed over the last decade.

GOLD -- Subscribers have been asking about gold, whether to sell or hold, whether to buy on a correction. The answer is always "what you can sleep comfortably with," and that doesn't mean what fits under your mattress. Gold has been holding up very well-- if the dollar continues to inflate as per Fed intentions, well-- gold will surge. Below we have a chart of gold against the Dow Index, it has been a great hedge against the losses on Wall Street.

Below we see gold versus the Euro and the British Pound respectively-- still in strong positions.

Hold your gold!!!

Hold your gold!!!

People have been asking me for years who will take over my business and continue the study and practice of Dow Theory when I retire. My son Ryan has grown up with Dow Theory Letters and has read my writing throughout his thirty years; he followed the markets during his studies of landscape architecture at UCBerkeley, his landscape architectural practice, and through his time designing, building and operating a restaurant in San Francisco-- which he sold recently to come join me after I had my TIA (mini-stroke).

Ryan has always been a excellent writer (and an eccentric like I am) and will be helping me research and write -- it's a relief.

Ryan has explored over 30 countries and brings some new energy and perspective aboard so I'd like to officially welcome him and remind him that I'm still the editor around here!!!

Richard Russell
website: Dow Theory Letters
email: Dow Theory Letters

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