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Gold/Mining/Energy : A to Z Junior Mining Research Site -- Ignore unavailable to you. Want to Upgrade?

To: 4figureau who wrote (891)	8/8/2002 10:15:04 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

Richard Russell on Gold: dowtheoryletters.com >>I bought 3,000 shares each of KGC, ECO and CBJ today -- I'll put these "cheapies" away and forget about 'em. I will treat them as perpetual warrants on gold. If they take off in three months, six months, a year, two years -- fine. Until then I'll treat them as warrants that will fly if gold ever gets over 500; they'll soar if gold approaches 1,000. Will that ever happen? A better question -- how low could the dollar go?<< I want to digress a bit to another subject. The subject is the US through its "war on terrorism" becoming the undisputed policeman to the world. It's obvious to me that "super-cop" is the way this Administration is going, no question about it. The latest sensational new is that according the Washington Post, A briefing given last month to a top Pentagon advisory board described Saudi Arabia as an enemy of the United States, and recommended that US officials give it an ultimatum to stop backing terrorism or face seizure of its oil fields and its financial assets invested in the United States. 'The Saudis are active at every level of the terror chain, from planners to financiers, from cadre to foot soldiers, from ideologists to cheerleaders,' stated the explosive briefing. It was presented on July 10 to the Defense Policy Board, a group of prominent intellectuals and former senior officials that advises the Pentagon on defense policy. Like it or not, this is the way a very influential element in and out of the US government is thinking. Now put yourself in the shoes of a multi-billionaire Saudi. If the US is even toying with the idea of seizing Saudi assets, the Saudi billionaire is going to start playing it safe. Playing it safe means moving a part of your assets OUT of the US and into other nations, most likely a European nation. The US as policeman to the world and as the world's bulwark against terrorism involves spending untold billions of dollars. The US already has its military stationed in thirty countries around the world. The US now spending 50% of all the defense spending in all the nations of the world. How can the dollar hold up against this kind of spending, this kind of strain? My answer is that "The dollar can't hold up against this kind of spending." This, I believe, is one of the forces behind the slowly gathering bull market in gold. With most of the economies of the world weak, the pressure to devalue one's currency, the pressure to re-inflate, will become increasingly strong. This is the ideal atmosphere for higher gold. In all history only one commodity has held its value and held its reputation as a store of value. That commodity is gold. No paper "money" in world history has served as a store if value. Only gold has held that title. Central banks of the world can whine that gold pays no interest, that gold is an outmoded "relic," that their paper money will rule. But in the end they're lying, and in the end truth will overpower lies. Ultimately, real money will always triumph over paper created by central bank machinations. It's simply a matter of time. I'm going to digress by talking a bit more about gold. As I see it, the funds in time will be forced to buy some gold shares. I think their first choice will be Newmont. But here's my thought. Somewhere ahead I believe we're going to see not only an expanding gold bull market but a surging, explosive gold bull market. If that happens, and I believe it will, then the big percentage increases will probably be seen in the secondary little gold stocks such as CBJ. GSS, KGC, BGO, ECO, TVX, DROOY, and even AEM, GLG, GG, GFI. My thinking is this -- for your gold position buy both end of the spectrum --buy actual gold coins such as Krugerrands and also buy the speculative "cheapie" golds. A gold stock like BGO can go from 1.10 to 9 dollars. whereas Newmont may go from 26 to say 50 or even 75.