Monday, October 26, 2009

Gold, Diamonds, And Picassos

From Richard Russell, editor of Dow Theory Letters, in remarks posted on his website on 10-31-08:

"As for gold, we don't hold gold in the hope of making a killing. We hold gold because gold is our safety net. The economic world is composed of debt and leverage. Even the US dollar is a product of debt. Only gold is pure wealth with no debt against it. Gold can't go bankrupt since it represents pure wealth. By the same token, diamonds represent wealth and Picassos represent wealth. The difference is that if you want to sell a diamond or a Picasso painting, there is no posted price for either. To sell a diamond or a Picasso, there's no bid or ask price -- you have to find an interested buyer."

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