At Casey Research, they have been watching the actions of foreign holders of U.S. dollars as closely as a Las Vegas pit boss watches a card player on a $1 million winning streak. Many of those in the deflation camp largely, or entirely, ignore the potential role these foreign holders may play in the drama now unfolding.

At the height of its late 2005 rally, natural gas in the U.S. was selling for just over $16/MMBtu, 350% higher than today’s price of $3.56. The oil/gas ratio, now over 18, is an all-time high… suggesting that natural gas is dirt cheap. So, it’s a buy, right?

In November of 1997, my partner and co-editor of  The Casey Report, Doug Casey, wrote an article titled “Foundations of Crisis,” which leaned heavily on the research of Neil Howe and the late William Strauss.  Howe and Strauss have written many books on how generations determine the course of history and how they will shape America’s future.

While everyone else has been focused on the banks’ stress tests and how much government is spending to bail out troubled “too big to fails,” a disturbing trend on the other side of the equation is now emerging: how much (or rather, how little) the U.S. government is receiving in tax revenues.

On several occasions of late, I have read or heard the phrase, “We are all Keynesians now,” an erudite way of expressing the idea that the free market is dead. And that the fate of the global economy now relies almost entirely on pragmatic measures yet to be taken by governments, most notably that of the United States.

The short-term path of gold is still unclear says David Galland. But its a good sign that demand for physical gold soars when prices tip towards $750 an ounce. And this threshold is likely to creep upwards as the US dollar loses its worth, and foreign governments convert currency reserves for the precious metal.

Of late, I have read a number of analysts, Jim Rogers even, who have expressed the view that gold could dip to the mid- to low $600 level.  Could happen, but I think not. Already, buyers of physical gold are finding anything near $700 to be cheap and so are helping to build a floor under the monetary metal.

Gold prices closed up $70 yesterday – the biggest one-day spike since 1980. This marked a sharp reversal from a two-month correction that shaved over 25% off the price of the precious metal.

David Galland says profit taking by institutional investors has ‘trampled’ metal prices. But the deepening crisis on Wall Street, geopolitical tensions and a traditional September bounce could send gold soaring back towards $1,000 an ounce. David says this could “happen literally almost overnight.”

Here’s a no-brainer long-term investment strategy to stick to: buy and hold resources now.

The failure and subsequent government bailout of Fannie Mae and Freddie Mac has been no surprise to the Casey Research team. But where do we go from here – will the bold action of the federal government save the housing market and revive the economy? The editors of The Casey Report weigh in with their thoughts…

If you own gold or are thinking of buying gold, David Galland’s latest article for The Daily Reckoning is a must-read.

Gold is starting to climb northwards from its nine-month low reached on August 15. But at just under $832 an ounce this morning in London trade, the yellow metal is still way off its March high of  $1,032.70.

Dave says two important events mean the recent setback in gold prices will not last long. The first of these is soaring inflation in the U.S. – which, if calculated by pre-Clinton metrics, is now running at 13.6%. The second is the failure of the euro as an alternative to the dollar…