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Russell: “An hour before the close (on Friday), the Dow was up 120 points, with substantially less volume.  This told me that institutions were selling into the rally.  The Dow closed slightly off its high.  I call this a poor day, accented by institutional selling.  Gold had its best day since last August, closing at a new high for the move. 

I think gold is overbought now, with many Johnny-come-latelies belatedly advising positions in gold.  Today there was a full-page ad in the New York Times advertising “bargain gold.”  This too suggested that gold, after its excellent rally, is now overdue for a rest.

In the big picture, I continue to believe that we’re in a world depression.  This will be followed by frantic activity by the Fed, as it prints new trillions of dollars.  Which I’m certain, by the way, is why gold has been rising.  I think we’re at the inflection point where the primary bear trend is overcoming the frantic action of the Fed. 

For years the Fed has been trying to establish its objective of 2% inflation.  But the global deflationary pressures have thwarted the Fed.  The dollar is key here.  If or when the dollar index closes under 80, I think we will see fireworks in gold.” 

Russell also warned:  “Despite government Fed lies and propaganda, I will repeat my take on the present situation.  The world is in a continuing depression, and only the vanishing US middle class is aware of it.  The Fed and the government are feeding an unending parade of lies to the American people. 

Once the actual facts emerge to the newspapers, I expect Janet Yellen to buy Treasuries at a greater rate than we've seen so far.  And at the same time, she will be creating new trillions of dollars without end.  Rising gold is anticipating these future Fed moves.  But rising gold will be a red flag for all to see.  I look for the dollar index as a first sign of the Fed's helplessness in the face of the ongoing world depression. 

So far, the dollar index has clung to a price of $80 plus.  I believe a break of the $80 support level for the dollar will be a sign that the Fed is losing its battle.  The powerful performance of gold for weeks and weeks is a subtle sign that the Fed has already lost its grip.  A position in gold is a position against the Federal Reserve. 

Unfortunately for the Fed, gold is traded across the face of the planet.  And currently gold is telling us the truth about the Fed's money creation.  I continue to like CEF as a security beyond the reach of the Fed and the government.  As noted yesterday, most gold items are now in the process of breaking out of their bases.  A vote for gold is a vote against central bank planning.  Gold will forever be a hated item in the eyes of central planners.”

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