What is the gold market saying about fiat currencies?
*Dow Theory Letters, by Richard Russell, February 14, 2008
“Gold — Here’s a daily chart of gold going back one year. Meanwhile, we’re told that ‘gold is volatile’ and ‘gold is dangerous’ and ‘gold is overbought’ and ‘gold is too expensive’ and ‘when gold is over 900 dollars, jewelers can’t sell gold jewelry.’ Again, it’s all just jaw-boning, chatter, gossip.
Instead, let’s do the simple thing. Let’s see if gold can hold above its current rather steep bullish trendline. The trendline would allow gold to back off to 880 and still look good, actually look powerful. Of course, on any corrective action if gold can hold above 900 so much the better.
Gold has been battling against the doubters and know-nothings for the last eight years. The great mass of Americans still prefer fiat paper currency to real money. But that will change somewhere ahead. When that changes, we’ll call it the third phase of one of the greatest bull markets in history. We’re not there yet, not by a long shot. Meanwhile, gold continues its silent war against ‘printed wealth.'”
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