Richard Russell - God, Gold, The Shanghai Index & The Dollar

kingworldnews.com

With gold, silver and stocks on the move, the Godfather of newsletter writers, Richard Russell, writes about God, Gold, the Shanghai Index and the dollar in a note to subscribers: “Gold is higher in the year 2012 for its 12th year in a row (up 9% this year, so far).  This year investors have fed almost $8 billion into the most popular gold ETF -- GLD.  One advantage for gold is that interest rates are historically low, which makes the carrying cost of gold very low and attractive.”

Richard Russell continues:

“In fact, compared with the inflation rate, interest rates are in the negative column, and the Fed promises to keep rates super-low for the next two years or so.

China is the great unknown as far as gold is concerned.  China is on the path to make the yuan a competitive world reserve currency.  I've long felt that China will back its currency with part-gold.  But gold today represents only 2% of China's sovereign resources.  To be a reserve currency, China needs two items: (1) lots of gold, and (2) a mighty military.

Below the important Shanghai index is semi-crashing.

I'll just hang on to my gold, and as the various junk fiat currencies fade into history, gold will shimmer and shine brighter.  In its long 12-year bull market history, gold has provided we "gold-bugs" with plenty of scares, but right now I'm more worried about the Yankee Dollar than I am about gold.  As I write this morning, gold (not GLD) is down only 2.00 to 1693.80.  It was down further earlier, but it may now be trying to base.  We'll see how it closes.  The gold mining stocks have been a constant drag on gold.  Unfortunately, the gold stocks tend to go with the general market.

Do you like to read charts?  Below is the safe-haven US dollar.  I dunno, if it was a stock, I don't think I'd buy it. Look, it just closed below its 50-day moving average.  That should have been support. MACD doesn't look that good, either.  I'd swap the darn paper for gold.

At the tender age of 88, it seems that I have, at last, found God.  This means that I am learning to live in the present -- minus all my worries about the future.  And I can tell you, it's a huge relief to be living without all my worries.

This way of thinking and acting has taken a huge strain off me.  It will probably add ten years to my life.  I no longer worry about a brutal depression that "may" lie just around the corner.  I live in the present, and in the present I am aware and calm and dealing with the here and now.  And right now there is no depression.  If a depression or some other catastrophe arrives, I'll deal with it then.”