Fleet Street Daily editor Ben Traynor says yesterday’s $70 spike in gold prices underscores the metal’s importance as a safe-haven investment. The simple truth is: Gold is the place to be when the going gets tough. As Bill Bonner says, gold works as a hedge against both inflation and deflation.

For much of this year the gold price has appeared to be inversely related to the perceived fate of the US economy (the key word in the sentence is ‘perceived’). This is hardly surprising since gold, like most commodities, is priced in dollars.

Things appear to be going from bad to worse over in Britain. The latest growth forecasts from the OECD say the country is already in recession, and is the only major economy to reach this dreaded condition…so far. Ben Traynor at Fleet Street Daily says the outlook is grim for the the economy, the FTSE index and the British pound. But there are still ways to make profits when times are hard.

Fleet Street Letter’s Ben Traynor says China’s domestic market will insulate the economy from a fall in demand for its exports. Strong local consumer and investor confidence undermine the theory that China will be shot down by the global downturn. Ben says this is good news for Western investors looking for growth while their local economies stagnate.

Over in London, Fleet Street Daily’s Ben Traynor says the dollar’s recent rally won’t last long.

Foreign governments are increasingly twitchy about holding dollar reserves or maintaining dollar pegs. But more importantly, the Fed has shown that it is more concerned about economic growth and safeguarding the financial sector than it is about inflation.

Ben says that by neglecting the threat of rising prices, the Fed is sending the buck down a slippery slope…