Gold Editorials & Commentary

The Dow Jones Industrial Average arrived at a critical juncture today (July 17) and moved decisively upward in penetration of overhead resistance of 9200-9260. As of this writing the Dow, rested at 9,328—a new all-time high.

Since we first outlined our scheme for profitable airline operation (NoFly Airlines) there have been so many letters demanding more information that we are going to use this opportunity to answer both of them.

Investors buy gold for six major reasons:

It is been our plaintive plea for some time that investors should begin looking for ways to exit their long positions in U.S.

It has been our view that the economies of Thailand, Indonesia, and Korea would remain in serious trouble until the disastrous deflationary policies of the IMF and the US Treasury were abandoned.

Not so very long ago our paper currency was like a hat check. You could take it to the issuer and get something for it: a hat, in the case of the hat check, or money, in the case of a bank note.

Many years ago, a friend and client with whom I've unfortunately lost contact, would recount his experiences growing up behind the Iron Curtain in Romania.

Stocks continued sideways last week as the ongoing, multi-week distribution phase of the equities mania continued apace with enlightened pros dumping shares on the benighted masses who constitute the buying segment of the market.

We spent the last week in Europe discussing some of the analysis and conclusions of our first edition of The Gold Book Annual with several central banks in Europe as well as some producers, dealers, and the World Gold Council management in Geneva.

The Yen Fundamentals

An article appearing in the Wall Street Journal last week heralded the return of the speculative mania, stating that "exuberance is back." The article made reference to last week's surge of several broad market indices as they shook off the bea

Having grown accustomed to steadily rising rates of inflation over the better part of 20 years, Americans have been inculcated with the belief that inflationary trends pose the only threat to economic stability.

Thrilling upside behavior. .

The dollar has been in a three-year bull market. It has moved massively against the yen and the exchange rates of many of the world's emerging economies. Lastly, the Asian economies it has rallied against have now entered serious recessions.

The internet has established itself as the truly rising star of human communication that people have dreamed of since spoken and written words were first exchanged.

The preternatural strength of U.S. stocks these days comes down to one disquieting fact: most investors don't know what else to do with their surplus cash.

The Dow and the Chicago Bulls exit with a flourish

With the continual drop in the price of gold the question as to WHO IS BUYING ALL THE GOLD has to be raised yet again, I would like you to consider the following hypothesis:

A banker asked a Native American for collateral for a loan of $500, and the Native American said he had no idea what collateral was. Asked if he had any property, the Native American said, "No, only 20 horses." The banker accepted the horses as collateral.

The interest being paid on the national debt is about a billion dollars per working day. It is being paid, ultimately, to the bankers, because the bankers are the source of our money. And that is only on the government's portion of the national debt!

Late last year the Swiss government made the startling announcement that it may sell more than half of its gold reserves.

Interesting developments have occurred in the leading global stock market indices since we made our last market comments.

The venerable Winston Churchill once observed, "The farther back one looks, the further in the future one may see." On the other hand a sage saw of Wall Street asserts "History repeats, and history doesn't repeat… with equal frequency.

In a way, China led the devaluation parade, having cut the yuan 70% against the dollar in 1994 after five previous devaluations in the last 13 years.

Bank credit is the single most important element behind the economic stability—or instability—of nearly every country in the world under the control of a central bank. This truism is more true here in America than in any other country.

We have previously noted that money has a political, as well as economic, significance. In a letter to "Colonel" House, Franklin Roosevelt acknowledged that certain financial powers have owned the United States government since the days of Andrew Jackson.

How large can a bubble grow before it bursts? Farther than you think. And there need not be a fatal pinprick that makes it burst. And when it bursts, the crash that ensues can be deeper and more discontinuous than you could ever imagine.

Orders for Computers, Communications Equipment, and Semiconductors

It does not occur anywhere near frequently enough, but when it does, the objective seeker of truth is potentially richly rewarded. It banishes boredom, it chases conformity, and it stimulates serious reflection.

I am fascinated by our fixation on the story of the ill-fated Titanic. Movie box office records and book sales are indicators that death by an iceberg of the greatest unsinkable ship has struck a deep chord within our individual and collective psyche.