US is approaching the 'fiscal cliff': Russell

Richard Russell of Dow Theory Letters says the USA is approaching a "fiscal cliff" which will lead to a bullish outlook for gold.

Russell, a veteran commentator with five decades of experience, says to King World News that a bullish trend for gold is imminent because of the United States' dire fiscal position.

Russell's investment recommendations include physical gold, gold ETF's and currency:

My choice for an investment position is — gold coins (bullion) and GLD and enough cash to pay your bills. If the Fed acts to stimulate the economy, it would be bullish for gold. If the nation goes over the fiscal cliff, such an emergency would probably be bullish for gold. If Congress fails to raise the debt limit, it should be bullish for gold (another emergency).

Although a deflationary scenario would be bearish for gold, Russell believes Federal Reserve chairman Ben Bernanke is certain to unleash "truck loads of fiat money" in such an event, due to the natural aversion of central bankers to deflation.

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