|
.
Harry Schultz Life
Strategies 
~ For THINKING
humanoids ~ (in 80 nations)
 An awful
time to be writing about it [gold]
Harry Schultz
extracted
from HSL #646 March 27,
2005 - DJIA 10,443
posted April 9, 2005
US$382 for a 1
year! subscription
Gold is a barometer. That's one of the reasons
politicians always talk it down, badmouth it & try to limit
its rises. They often make it illegal to own (eg, Nazi Germany
& the USA under FDR & until the 1970's). But the barometer
continued to function, despite Hitler & FDR. The 2 had much
in common. It has ever been thus & always will be. Gold measures
the world's economic, monetary & political climate. So an
article about gold should concern itself mainly with those factors,
not just gold itself. Fortunately, the charts of various mkts
tell us much of what we need to know. Currency charts speak volumes!
The US$ took over the lead role from the £ when UK gave
up gold as backing & the US adopted it. But US politicians,
loving power & hating control mechanisms (like gold or spending
limits imposed by legislatures), gradually removed the gold backing
- defying the US Constitution (which they pledge to uphold but
rarely do).
So the US$ was left without backing, but was by that time already
the world's main reserve currency. The system enabled the US
to free-load off the world. Washington wasn't content with owning
a dishonest roulette wheel; they had to exceed all rational limits
on govt spending, & have amassed debts & deficits beyond
records by any nation. Result: Asian nations want to exit the
US$. That's easier spoken than actioned. Yet, it's slowly happening,
via buying fewer US bonds & selling a few here & there
when DC isn't looking. As economist Stephan Roach says: "The
standard US response borders on arrogance: 'What choice
do they have?' The presumption is US has Asia over a barrel
-- unwilling to accept a drop in export competitiveness that
currency appreciation might bring.
"This misses a key cost-benefit trade-off -- weighing
a hit to exports against a portfolio loss in US$ assets. The
bigger the build-up of $ reserves, the more this
trade-off is likely to tip toward $ diversification --
spelling the end of US cut-rate foreign financing." Our
currency charts reflect this. All non-US$ currency charts are
long-term bullish. US$ will have sharp rallies (like today),
which are often achieved through intervention or oversold conditions
& short covering, but the longterm trendlines are clear.
The $ remains a sell, which means gold remains in a bull mkt.
$-rallies will be gold corrections, usually tradable. Other charts
that affect gold: bonds, interest rates, oil, CRB, all of which
are long-term favourable to gold.
Misc: Oz readers: we now have 3 Oz gold stks in our weekly
on-line svc (Gold
Charts R Us).
•• GCRU also now contains comments on currencies,
commods.
•• As I said in GC, avoid the term gold bugs; it's
belittling. Instead say: gold bulls or gold advocates.
•• Chris Powell rightly says: "The World Gold
Council exists to make sure there is no real world
gold council. It is a straw man, set up to prevent any realistic
effort to help the gold cause."
••• Charts show gold at critical shorterm make/break
point, an awful time to be writing about it. If gold moves
up from 3/24 low of 427, (basis June futures) it's headed for
448-450 area, for a test; a break above that will test Dec 462
peak. But if gold breaks 427 now it could head for test of Sept
04 uptrend at 417. Breaking that could dip to apex of massive
triangle at 404. But even that is still well above the long-term
uptrend line. (see pg 11 Futures section for specific buy/sell
advice).
•••• Am off for the Alps now. Snowlong!
From my wigwam to your wigwam.
Heap big good wishes.
Uncle Harry D (for Deflation-Doubting) Schultz
Lots & LOTS more
follows for subscribers,
Harry Schultz
Archives
©Copyright
1964-2005 F.E.R.C.
|
 HSL
-- Harry Schultz Life Strategies is the most valuable newsletter
you'll ever read... "Uncle Harry's" advice for
a whole year is only US$382!
HSL is available
via e-mail, fax, or mail. You can subscribe online via credit
card. OR subscribe via fax or mail --> click
here to subscribe
|
321gold Inc
|
