By Richard Russell in Dow Theory Letters:

The US will be running trillion-dollar deficits for years to come. How will these debts be paid off? The answer is that they won't be paid off, future US administrations will attempt to get rid of the debts via inflation and through rising taxes. It's unthinkable that the US will attempt to renege on its debt.

As new trillions of dollars are created by the Fed, the dollar is under "stealth devaluation." In the choice between deflation and dollar-devaluation, the Fed has clearly chosen the path of dollar devaluation. The investor's defense against the Fed's decision -- gold.

Learn more about the excellent Dow Theory Letters.

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