From Richard Russell in Dow Theory Letters:

...As I've said a thousand times, Fed Chief Bernanke will absolutely not accept deflation...

Shrewd gold-accumulators are well aware of [this]. As the deflationary and deleveraging forces press on the US economy, the Bernanke Fed is ready to devalue the US dollar in its ("whatever it takes") battle to hold back deflation.

Let's boil the whole thing down to three sentences.

(1)The Fed will not tolerate the growing forces of deflation.

(2) To combat the deflationary forces, the Fed will devalue the dollar by printing trillions more of Federal fiat money.

(3) Once it is realized that the Fed is on the path to devalue the dollar, there will be a panic to buy and own gold.

Crux Note: Learn more about the excellent Dow Theory Letters here.

More from Richard Russell:

Richard Russell: Don't be fooled by bear market rallies

Richard Russell: "This market has nowhere to go but down"

Richard Russell: Why the bull market in gold has much farther to go