No market price is more important -- as a summary measure of what global investors think of a country's prospects (or its political leadership) and as a forecaster of financial asset returns -- than the local-currency gold price. A rising gold price-- which means a currency is worth less-and-less--implies a vote of 'no (or lesser) confidence' and is bearish for financial asset returns. In contrast, a declining gold price -- which means a currency is worth more-and-more -- implies a vote of confidence and is bullish for financial asset returns.
Continues, Mr. Salsman,
"The fast-rising dollar-gold price means that global investors are casting a vote of diminishing confidence in the Bush Administration. It's not because the U.S. is acting in a war-like manner -- but because it isn't. Notice that U.S. markets had begun to improve in early October, when Congress (finally) approved a war powers resolution; that made war more likely, not less. But President Bush and Secretary Powell have continued to appease terror regimes and gangs -- and appease more cravenly the more brazen the foreign dictators and terrorists become. U.S. appeasement has intensified the war-mongering of those savages who run North Korea."