NASDAQ_400
03-29-2003, 06:13 AM
Gold -- and the Dollar
Killing the "messenger"
Richard Russell
Dow Theory Letters
March 31, 2003
Extracted from the 28 March 2003 issue of Richard Russell's Dow Theory Remarks
Gold -- and the Dollar -- I've been reading more and more about the possibility of gold manipulation. Nothing's been proved yet, but I suspect that gold is being manipulated. The Fed's money-manufacturing machine grinds out liquidity week after week.
Nobody, it seems, follows the money supply figures any more, but I do. I just received the figures for the most recent week, which was the week of March 17. For that week M-3, the broad measure of the money supply, was up $43.4 billion to a total of $8.59 trillion.
Consider this -- the worth of the entire gold industry, all its stocks, is estimated to be $90 billion. So in one week of dollar-manufacturing the Fed has "created" enough dollars to buy half of the entire gold industry. Does that make sense?
It's obvious that the Fed doesn't want the public to realize what an engine of inflation the Fed is. And there is no clearer signal that the Fed is pouring out Federal Reserve Notes (we mistakenly call them dollars) than rising gold.
Gold or real, tangible money will always compete with fiat or paper money -- therefore, all central banks have a vested interest in killing the "messenger." In other words, they don't want gold to rally.
Time after time we've seen gold pushing up, only to be knocked down again.
An interesting puzzle -- last September 24, Gold closed at 328.80. On that same day the Dollar Index closed at 109.04. Today gold as I write is at 330, roughly at the same price it was last September 24. But today the Dollar Index is at 100.35, or about 9% lower than it was last September 24.
Doesn't it stands to reason that with the dollar 9% lower than it was last September 24 that gold would be substantially higher than it was last September 24? What has happened to hold gold back? You tell me.
Looking at the June Dollar Index, it embarked on a long decline to a low of 98.36 struck on March 10. From there the Index rallied to a closing high of 102.45 on March 21. Today the Dollar Index stands at 100.61, just above its 50-day moving average which stands at 100.44.
The dollar, as I've stated many times recently, is the Achilles Heel of this market. So far, the Dollar Index has held up remarkably well in the face of all the projected horrendous US deficits and debts. We know that governments will "intervene" when they want their currency to be higher or lower.
More follows for subscribers. . .
Richard Russell
March 31, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc
Killing the "messenger"
Richard Russell
Dow Theory Letters
March 31, 2003
Extracted from the 28 March 2003 issue of Richard Russell's Dow Theory Remarks
Gold -- and the Dollar -- I've been reading more and more about the possibility of gold manipulation. Nothing's been proved yet, but I suspect that gold is being manipulated. The Fed's money-manufacturing machine grinds out liquidity week after week.
Nobody, it seems, follows the money supply figures any more, but I do. I just received the figures for the most recent week, which was the week of March 17. For that week M-3, the broad measure of the money supply, was up $43.4 billion to a total of $8.59 trillion.
Consider this -- the worth of the entire gold industry, all its stocks, is estimated to be $90 billion. So in one week of dollar-manufacturing the Fed has "created" enough dollars to buy half of the entire gold industry. Does that make sense?
It's obvious that the Fed doesn't want the public to realize what an engine of inflation the Fed is. And there is no clearer signal that the Fed is pouring out Federal Reserve Notes (we mistakenly call them dollars) than rising gold.
Gold or real, tangible money will always compete with fiat or paper money -- therefore, all central banks have a vested interest in killing the "messenger." In other words, they don't want gold to rally.
Time after time we've seen gold pushing up, only to be knocked down again.
An interesting puzzle -- last September 24, Gold closed at 328.80. On that same day the Dollar Index closed at 109.04. Today gold as I write is at 330, roughly at the same price it was last September 24. But today the Dollar Index is at 100.35, or about 9% lower than it was last September 24.
Doesn't it stands to reason that with the dollar 9% lower than it was last September 24 that gold would be substantially higher than it was last September 24? What has happened to hold gold back? You tell me.
Looking at the June Dollar Index, it embarked on a long decline to a low of 98.36 struck on March 10. From there the Index rallied to a closing high of 102.45 on March 21. Today the Dollar Index stands at 100.61, just above its 50-day moving average which stands at 100.44.
The dollar, as I've stated many times recently, is the Achilles Heel of this market. So far, the Dollar Index has held up remarkably well in the face of all the projected horrendous US deficits and debts. We know that governments will "intervene" when they want their currency to be higher or lower.
More follows for subscribers. . .
Richard Russell
March 31, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc