Some people still think gold is money. And they have accumulated much more wealth than anyone else here:
And now a word from Richard Russell, a man still young and fresh and no where near the "Best Before” date featured on many consumer products:
January 31, 2004 -- This is going to be very short. Last year the Bank of Japan spent $187 billion to buy dollars in order to keep the dollar higher against the yen (obviously, Japan wants a lower yen to render their exports competitive to the US).
In today's Financial Times I read that in the month of January 2004 alone, the BOJ spent an incredible (record) $67 billion again in intervention. That's $67 billion in a single month!!
Despite all the BOJ intervention, the yen remains just off its highs.
This indicates the extraordinary inherent weakness of the dollar. Imagine where the dollar would be if the BOJ hadn't intervened!
What happens to all these dollars that Japan buys? Much of it goes into buying US Treasury bonds -- which is what's holding up the bonds. What about the currency risk in the bonds? That's a risk that both Japan and China are willing to take -- to keep the game going.
All this makes gold look ridiculously cheap. Every major nation is increasing its paper money. The problem with gold is that people still see it as a commodity like zinc or wheat or pork bellies.
The great secret that the central banks don't want you to know is that GOLD IS MONEY. As the dollar declines through time, the secret of gold will become common knowledge -- this will happen as the gold bull market progresses. When people see what's happening to their paper "money," the great rush into gold will begin. We are still in the accumulation phase of the gold bull market.>>>>>>
So maybe the dollar does have room to move down further at some point. That is where I think it will go.
AI
