Do the Wall Street media like to argue an anti-gold stance?
*Dow Theory Letters, by Richard Russell, July 26, 2010
”Not you, Alan Abelson, not you!
In the latest issue of Barron’s, Alan heads his weekly column as follows: ‘A Contrarian’s View of Gold.’ Clearly, it’s not Abelson’s view, it’s some contrarian. And who’s the contrarian? It’s Peter Berizen, who works for my old friends at the Bank Credit Analyst. I’ve been trading services with the Bank Credit Analyst for about 50 years, and I know that they have never been openly enthusiastic about gold. Peter obtains his anti-gold arguments from Barclay’s Capital’s latest commodity forecasts. Peter lists six arguments suggesting that gold has made most of its move to the upside.
And what do I think? I think it’s pure baloney. Gold has been in a sensational but secret and subtle bull market for the last ten years. In my experience, I’ve never seen a long-term primary bull market end without a highly speculative third phase. So far, although gold has enjoyed a spectacular percentage rise over the last decade, gold has never produced a third, speculative phase. In fact, figuring from gold’s peak of 850 an ounce in 1980, gold hasn’t even kept up with inflation. Adjusting gold for 30 years of inflation, gold today would have to be over $2,000 an ounce. Thus, gold can hardly have been in a speculative bull market phase so far.
My own thinking is that somewhere ahead we will indeed see gold go into its speculative third phase. So that’s my answer to Peter Berizen’s anti-gold stance.
Alan Abelson, I know you like to be controversial, but how could you do it? Pretty soon I’ll have to rank you with Alan Greenspan, who sold out on his intensely pro-gold stance when he became Fed Chairman.”
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