Forum Archive Index - November 2003

["SBR Holdings Ltd" <slimbev@xtra.co.nz>]

Interesting section from richard russells newsletter

We're entering a period where tangibles are starting to outperform financials……

I hear a lot of talk about the favorable supply-demand situation in gold. That's interesting, but I don't think it's the controlling factor in gold. Gold is political and its psychological. From the political standpoint, rising gold or I should say surging gold is a red flag for the central banks and the establishment. Thus there is a constant battle by the central banks and the establishment to keep gold from surging and to a lesser extent to keep gold from moving higher at all.

The real power behind gold is psychological. Unlike bonds and some stocks, gold pays you nothing to hold it. Therefore, people hold gold as a store of value, as a protection against the predations of the central banks and as protection against untrustworthy governments. Gold has saved many a life and many a fortune. Gold is held "just in case."

People rush into stocks out of greed. People rush into gold out of fear. Fear is the strongest of all emotions, which has led to the expression, "There's no fever like gold fever."

 

Go with the flow

Slimbo