“It looks like there are finally some signs of recovery in the US,” said more than one person we talked to last night.
The occasion was a cocktail party…held on the grounds of a stately chateau. The summer social season is underway in Poitou. We are attending dinners, plays, cocktail receptions, barbecues and weddings.
Last night, waiters in tuxedos passed out champagne, foie gras canapés, and desserts while hundreds of guests milled about and talked.
“You might want to hedge your bets on this recovery,” we told one Daily Reckoning reader. “It’s probably not going to work out.”
“But I’m confused about something,” he continued. “You’ve been urging me to buy gold for years. And now you seem to be changing your mind.”
“No…no…not at all. I’m still a gold bug. It’s just that I expect this rebound to end…and for stocks to go down, possibly down a lot. The dollar is what people want when they are frightened. The dollar is going down now because they think there’s no longer anything to be frightened about. But when this recovery disappoints them, investors are going to be more frightened than ever. Because they’ll realize that we’re faced with a depression…and that the feds can’t do anything about it. They’re going to rush to the safety of dollars…at least for a while. Probably long enough to shake out a lot of gold buyers.”
for The Daily Reckoning Australia