Gold, as I write, is skeptical and is up 21 points to a new record high.
What’s gold worried about? For one thing, the Obama-Congress triumph doesn’t address the galloping costs of Medicare and Medicaid, which will explode as the US population expands. The new bill says not a word about the rising costs.
One way of paying for the added costs is the Fed’s way, which is known as printing money. On this count alone it is worth holding gold for the long pull. As other nations print their costs, money growth worldwide will accelerate, and the dollar will gravitate towards worthlessness. This is the fate of every fiat currency that ever existed, but at present the dollar is one of the weaker fiat currencies. The dollar is weak because almost every other fiat currency is stronger. Obviously, the world was not thrilled with the Obama-Congressional deal.
Those who want safety from these machinations have one place to turn to and that is gold and silver related assets. If you do not move to protect yourself now there may be little or nothing to protect in the future.
Friday’s Daily will be my last posting until the first week in September. I will be around, but taking most of August off and working on a special project. In the meantime, my son Andy will publish the Daily. Cut him some slack – in addition to writing the Daily, he has to run the company, work with clients and answer phone calls. It will be a good experience for Andy because sooner or later, he will inherit the responsibility of writing the Daily. He will do a great job. He knows what I do, so there will be continuity, minus my personal comments. I shall be back before you know it, throwing in my two-cents worth. I bet gold tops $1750 by the time I am back. That would put silver somewhere around $46 or $47.