Thursday, October 29, 2009

US Dollar, Silver, The Re-emergence of Gold

From The Privateer's end of week wrap up 'Gold This Week':

If you are content to have your government take care of your financial future, then the Gold price is, or should be, reasonably irrelevant to you. If you are NOT content, then it should be of the HIGHEST interest. That is especially true if you are not buying Gold with $US Dollars. In terms of many other major currencies, Gold has hardly moved in price this week and remains WELL below its highs of earlier this year.

But we would have thought that any subscriber or reader of this page, especially any of our longer-term readers, would have already established a position. Well, the most important Gold price - the $US Gold price - has just revalidated its bull market. That means that it is going to go a LOT higher, especially in $US terms. How high? We have no idea. But no matter how high the $US price of Gold goes, the metal will not REALLY come into its own unless and until it regains its historical role as MONEY. That didn't happen at the end of $US Gold's last bull run in 1979-80. But it took US interest rates above 20 percent to lure people back into $US Dollars and other paper currencies.

It will happen this time. For one reason amongst many others, global government debt levels mean that interest rates of even a fraction of those which held sway at the end of the 1970s would literally "kill" modern fiat currencies. The re-emergence of Gold as money well almost certainly not BEGIN in the US, but it will begin somewhere. Don't forget, the Chinese are now urging their citizens to buy and hold PHYSICAL Gold. Inscrutable? We don't think so.


The US dollar is looking terrible. Watch out when it goes below its all time low.

If US dollars are shares of US, Inc., then they are signaling the Greatest/Greater US depression.

The dollar rallied in 2008 so it makes sense that commodities took a dive. Now, the dollar is heading back down as commodities are heading back up. Cost of food, heating oil, driving gas, the necessities of life, heading up in US dollar prices. Not good.

A tidbit of news:

"Food stamp list soars past 35 million: USDA, Thu Sep 3, 2009 3:17pm EDT
WASHINGTON (Reuters) - More than 35 million Americans received food stamps in June, up 22 percent from June 2008 and a new record as the country continued to grapple with the worst recession since the Great Depression of the 1930s."

"We have to spend money to keep from going broke," says Joe Biden (Obama's vice president), a man who is out of his depth in the bathtub. - Bill Bonner

And then there is Ben Bernanke at the head of the Fed despite no financial market, business or banking experience. Huh??? Yup, it's true.

"Who loves ya, baby?" - Putin talking to the bar.

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