My Dear Friends,
This is a question submitted by the most notable gold personality,
Dean Harry Schultz, to direct you towards the proper investigation of a
survival strategy.
Have the insiders outsmarted us?
Will the rest of the world accommodate the effort to depress the gold
price as a means of supporting the US dollar? That is the key question
to which the answer will be shortly revealed. The gold market is a
market of sovereigns now, and not a paper group of speculators and
investors with differing interests.
The determinant of your question is expressed as is the USDX
fundamentally strong? No, it is not because of the limited momentum of
economic statistics representing that which is called the recovery. Can
something as fundamentally and market weak as the dollar due to increase
in supply and not demand be maintained in value by dimming the light of
alternative venues? I very much doubt the longevity of that plan of
hurting other to strengthen self.
In order for the strategy of QE to work there has to be a
significant, long term, and stout Western economic world recovery that
automatically cancels QE via balance sheet repair. This recovery in the
western world is a straight line affair, bouncing off a low. It does not
look like QE will succeed in the degree the Fed wishes to make their
strategy a success of monetary innovation. That innovation was not of
tool but size of QE tool. Therefore the clear and unquestionable effort
to dim the light of dollar alternatives is to hide dollar weakness.
When has such a negative strategy ever won the war? The dollar mirage
that is trying to be built must be limited in time. Dimming the light
of dollar alternatives is the economic form of a negative strategy to
kick the can of disorder forward. We witnessed this in 1974 and 1979
with the exact same gold commentators then declaring an end to the bull
market. It did not succeed, market wise, then and has little chance of
success market wise now.
China and Russia will be the determining factors in this current
currency economic hot war. Patience and intelligence have always been
the key to the courage required to survive.
Our prime directive is, "to survive."
History has taught us the weak succumb, and only the strong survive.
Being half Irish, I welcome just another battle in the war for economic
freedom and therefore survival for those I care so deeply for.
Respectfully,
Jim
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