Dow Theory Letters (10/06/2008)
"Can the dollar hold up in the face of a probable series of trillion dollar deficits? Improbable. How long will our creditors be willing to hold and continue to take in dollars in the face of monster US deficits? Remember, the US is the only nation on earth that can manufacture (out of thin air) the fiat currency to pay off its debts. We won't be able to print our way out of this bear market -- our creditors won't allow us to do it. At some point, I believe, our creditors will demand gold instead of Federal Reserve Notes. At that point, it will be to the US's advantage for gold to be as high-priced as possible -- What will we do? The US will cut loose the price of gold FROM ITS CURRENT ridiculous official price of $35 an ounce and give gold to our creditors at a price of $30,000 an ounce."