I have read wildly opposing views from very respected advisors about the gold close on Friday. It looks like gold has broken through $1000. But is it a top or a sign of strength?

The dollar is sagging, but somehow it seems to be bottoming. Gold had a spike on Friday, which is characteristic of a top, but not a huge spike. We’ll see what happens early in the week.

Regarding the dollar, I recently read a report about a speculation that could make sense. The author thinks that 4 billionaires could gang up on the Euro to send it crashing. And he thinks it will happen before the next ECB meeting on Oct 7.

He makes the case that this has happened at numerous times in recent and older history. He names the 4, including of course George Soros, who took the credit for crashing the British pound about 10 years ago. One of the 4 is someone who probably also participated in that raid on the pound but remained quiet.

The economic basis of this view is that the economic reality in Europe is much worse than widely perceived at present, and the policies of the ECB deserve a good whacking by these modern-day barbarians. Soros became a billionaire in one day with his previous stunt.

Hmm, sounds plausible, doesn’t it?

One advisor, who is still bullish on gold and thinks the parabolic move is still in force, is convinced the economic recovery is the strongest ever in history based on leading indicators. He think the S&P will break through 1060 and keep going up for the next year or two.

On the other hand, here is an interesting summary of the flip side:

http://globaleconomicanalysis.blogspot.com/2009/09/five-points-on-markets-earnings-economy.html

I suspect there is a bit of truth in both views. It’s just a question of which side comes to the front at a given point in time. So far, the “green shoots” recovery view is widely held and driving markets higher. That could carry on for much longer than those who think the market is way too overbought are willing to believe.

But one piece of significant bad news could tip things the other way in a big hurry, as the market does seem overbought and there is a lot of skepticism out there about the “recovery.” The markets are driven by perception, and perception is very delicate these days.