Home   Links   Editorials

Something is changing. . .

Richard Russell snippet
Dow Theory Letters
December 1, 2006

Extracted from the Nov 30, 2006 edition of Richard's Remarks

Russell Comment --November 30, 2006 -- I'm writing this two hours before the opening of today's market. The Dollar Index is down about .17 points and gold has been climbing. As I write, Dec. gold is up 9.20 to 650.90 and Dec. silver is up 26 to 14.03. I have the sense that something is going on, something is changing, in the FOREX market and in the precious metals market. My guess is that it has to do with China and the Asian nations and their holdings of declining US dollar denominated securities.

Chinese monetary reserves have now climbed over the one trillion dollar mark, 70 percent of which are in dollar securities. The Chinese are watching the dollar decline, and they are watching the bearish background for the dollar -- deficits. A major decline in the dollar would represent a disaster for China, and various Chinese spokesmen have recently "suggested" that China speed up is diversification program.

The Dollar Index is the mirror image of the dollar's main competition, the euro. There's been an initial break, followed by a compact little cluster. If the Dollar Index falls out of this cluster, we can expect another sharp decline. As I said, "something is changing." Up to now, the dollar has been declining "lightly and politely." And I'm wondering if a further less polite decline in the dollar is on the way.

lots more follows for subscribers...

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

© Copyright 1958-2014 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 $300, tax deductible if ordered through your business).

321gold Inc