Richard Russell 01 (May 08 - Dec 14)

[Muhajir]

With gold and silver near the $1,500 and $35 area respectively, the Godfather of newsletter writers Richard Russell had this to say,

“GOLD -- The chart below shows daily gold over the last two years. During that period gold has respected its 150-day moving average, which is the blue line that you see on the chart. Over the last two years gold has tested its 150-day MA six times, and each time gold has held above the 150-day MA -- and then rallied to new highs.”



“The latest action shows gold holding well ABOVE its 150-day MA and consolidating. Frankly, I thought gold was in for another test of its 150-day MA, but I may have been too pessimistic. Gold does not seem to want to test its MA (so far) this time, and that's a bullish factor. As I write this morning June gold is up over 19 points, and there seems to be urgent buying in gold.

We now know that there has been a dramatic reversal in world central bank thinking, and instead of selling gold as they have been doing, world central banks, on balance, are buying gold. We know that China, Russian and many Asian countries are urgently increasing their gold-to-reserves ratio.

Rising gold is also putting pressure on the silver shorts. I've heard that there is now more silver shorted on the COMEX than is available in physical silver.

A few weeks ago, shorting silver was considered a "no-brainer." In this business, if you run with the crowd, you're liable to get trampled to death.

An increasingly large percentage of America's population is approaching "retirement age."...As I've said before, the Federal Reserve was created secretly by bankers. The Fed is owned by bankers, and it was created for banks and bankers. Bonuses at the big banks are currently larger than ever as are dividends. In the meantime, Americans of retirement age have run head first into the brick wall of zero returns.

...So from now on, you can expect a veritable avalanche of "good times talk" out of Washington. The employment figures will be skewed to the administration's advantage, the inflation figures will be a lie, the benefit that the government has bestowed upon us will be exaggerated. And the Bin Laden victory will be touted to the high heavens. Hey, "at last we're safe."

But more powerful than anything else will be the trend of the stock market. If the bull market dies here or even if it corrects severely, the pressure will fall heavily on the administration and the Congress.

For this reason, I expect the rest of the year 2011 to be "wild and wooly." I expect government lies and propaganda to reach a crescendo. I'm bracing myself for a parade of surprises. Politicians love power and perks. But to keep those two, they must also keep their jobs. Therefore, coming up, I expect an extreme in dirty politics and internecine political battles. The year 2011 should wind up as a banner year for political and economic propaganda, all lies and bull-shit.”

Richard Russell’s Dow Theory Letters CLICK HERE.

I would appreciate everyone's opinion on highlighted quote in red. Thanks in advance.

[winston]

2 TECHNICAL TRENDS THAT WORRY RICHARD RUSSELL by Cullen Roche

In his most recent letter, Richard Russell of the Dow Theory Letters discussed why he is growing increasingly concerned about the state of the bull market. Russell believes there is “technical deterioration” when looking under the hood at the market:

http://pragcap.com/2-technical-trends-t ... rd-russell

[winston]

"All-out" inflation is guaranteed this fall

With inflation heating up as far as American consumers are concerned, the pressure is on the Bernanke Fed to "cool it" on its quantitative easing (QE). I think the stock market (now slumping) and the dollar (now rising) are reflecting this.

Thus the Fed might be setting off a temporary slump in the summer economy. If so, Bernanke could announce, "See, if we ease up, the economy eases up as well." All of which strengthens the case for QE3. Of course, President Obama would love a late pick-up in the U.S. economy as the nation moves into the 2012 election period.

So the Russell crystal ball says, "Prepare for the summer doldrums (maybe even a slump), and then be ready for an economic revival in the fall and into 2012. Also get ready for all-out inflation as the Fed steps on the QE3 accelerator in late 2011.

I think the gold action goes along with the above scenario. Why take profits or sell your gold, when the real move in gold is slated for 2012 and beyond?


Source: Dow Theory Letters

[winston]

RICHARD RUSSELL: BUY SILVER by Cullen Roche

Like myself, Richard Russell had been vocally skeptical about the parabolic surge in silver prices. But he isn’t a believer in the silver theory.

Russell says the recent correction is healthy and he feels as though the recent consolidation is setting the stage for the next leg up.

In his latest Dow Theory Letter the investment legend explained why he’s bullish again about silver:

http://pragcap.com/richard-russell-buy-silver

[winston]

Gold will be "the last man standing"

Over the decades and the centuries, the safest place to keep your wealth has been in gold. Even Picassos can go out of style. Colored diamonds are currently taking precedence over white diamonds. But gold is built into the DNA of man.

In coin form, in brick form, in necklace form, in the form of Rolex watches, gold has always been a magnet for men (well, except for Warren Buffett).

During hyper-inflation or deadening deflation, when "all is lost," gold holds its attraction for humans. Gold, in a matter of speaking, is "the last man standing."

Month by month, year by year, to the frustration of the Fed, gold is creeping back into the system. Now we hear the state of Utah has instituted a new law stating (as per the U.S. Constitution) that gold and silver are legal tender for the settlement of all debts. Furthermore, gold will be valued as per its weight rather than its absurd legal tender price on the face of U.S. coins.

Utah will probably start issuing gold and silver coins or bars in various denominations so they can be used in trade in Utah. Other states are expected to follow Utah's example. If so, people may start to demand payment for their work in silver and gold rather than in irredeemable Federal Reserve notes.


Source: Dow Theory Letters

[winston]

RICHARD RUSSELL: THE #1 REASON TO BE UNDERWEIGHT EQUITIES
5 July 2011 by Cullen Roche

Richard Russell’s latest letter is something that most investors can probably empathize with to some degree. While it’s clear that the equity markets are in the midst of a bull market, it’s less clear whether now is still a good time to be buying.

Russell, while acknowledging that this is certainly a bull market, prefers not to be overweight equities for one single reason – the values just aren’t that good:

http://pragcap.com/richard-russell-the- ... t-equities

[winston]

Three big bullish signs for gold stocks Advertisement
From Richard Russell on 321gold:

From its July 1 low of 1,482, gold has risen almost in a straight line to its July 13 high of 1,585, a spectacular rise of 103 points. Obviously, gold is in need of a rest or even a correction.

For long-suffering holders of gold mining stocks, however, "green shoots" (remember them?) are beginning to show.

Below, we see GDM, the gold miners index, shooting high into the 1,600s and bettering by a wide margin its preceding peak. Score a big gold star for the gold miners.


http://www.321gold.com/editorials/russe ... 71511.html

[winston]

Ben Bernanke and Gold

When Bernanke was asked if gold was money, he answered "No."

When Bernanke was asked why the U.S. held the largest hoard of gold of any nation on earth, he answered, "Convention."

My take -- Bernanke is either dishonest, a liar, or ignorant. Take your choice.

My pick -- he's up against the wall and dishonest. The Federal Reserve is all about fiat money. Is it any wonder that the Fed Chairman had to deny that gold is money?

Source: Dow Theory Letters

[winston]

Fair chance that most of bear market is behind us

“We’ve seen some extreme downside action. But Jim Stack of InvesTech Research reports that on the August 8th panic the ratio of declining stocks to advancing stocks was 77 to 1, a ratio never seen before in the past 80 years. The closest incidents were the May 1940 ratio when France fell to Germany; that ratio was 60 to 1.

The second incident was on Black Monday during October 1987 when the ratio was 49 to 1. In both cases, those hugely high ratios marked a near-bottom, and within one month of those ratios the market was 10% higher.

“A few days ago we saw down volume equal to 98% of up + down volume, an incredible extreme. After all the negative action, if the S&P still chooses the bearish path and breaks to new lows, then we’re in for another spate of down-markets.

In other words, after all the negative action, the market should be rally — we need at least a “dead-cat” bounce to above 1208. If the market can’t rally from here, then we know that something is really wrong!

“My feeling now is that this bear market will probably not be a monster, but I believe that there is a fair chance that most of it is behind us. This will be a long and arduous recovery, and stocks bought here (even blue chips) will not prove to be winners over the next five years. I would not buy stocks for income.

“It all reminds me of the great Zen Koan, “One fool can ask more questions than a dozen wise men can answer.” And who’s the fool? Why it’s none other than your editor.”

Source: Richard Russell, Dow Theory Letters, August 19, 2011.

[winston]

RICHARD RUSSELL: 12 TIPS FOR THE NEW NORMAL by Cullen Roche

Few investment legends have weathered more than Richard Russell. Born in the Great Depression, Russell knows what it’s like to live in hard times.

And in this new normal he has some survival tips. The following are courtesy of Russell’s Dow Theory Letters:

1 — Be a skinflint. Cut down on your spending. And be very nice to your boss, assuming you still have a job.

2 — Think in terms of NOT losing money. Forget about easy Wall Street profits. There aren’t going to be any easy profits — not without a huge new infusion of borrowed money.

3 — Be sceptical of everything you read. The media is desperate for circulation, and it will slap on the cover of its magazine or newspaper any damn fool statement that it thinks will sell.

4 — Have faith in your gold. As confidence in the whole monetary system slowly fades, the desire for gold will heighten.

5 — Remember, there’s often a large correction prior to the final speculative gold run.

6 — This time there may not be a “final gold rise,” because large interests may just decide never to sell their gold. They’ll keep their gold as a symbol of “eternal wealth” that can’t be destroyed of go bankrupt.

7– Check out carefully the Permanent Portfolio (PRPFX). So far, it has done well and held up well. It’s actually up so far this year, which is extraordinary. YTD return is 7.33%.

8 — Be very cynical about those “fabulous” money-making ads you hear on TV. Money is hard to make these days and risk in just about everything is high.

9 — Cut out expensive discretionary spending. Instead of eating at your favorite local restaurant, eat home and save many bucks. Supermarkets now stock endless “heat up” frozen dinners. Or better still, starting from scratch make your own dinners. Cooking is coming back.

10 — Take the long view. With stock dividends below 2.5%, the odds are that holding stocks “for the long run” is going to be discouraging or a loser.

11 — Money is made in the BUYING. When you buy anything at the right (low) price, the odds are that you’re going to make money through the passage of time.

12 — Wall Street is suffering. When the Street suffers, its natural tendency is to come up with new “ideas.” The ideas are usually risky (i.e., mortgage-backed packages). Be very sceptical of new Wall Street ideas and products.

Source: Dow Theory Letters

http://pragcap.com/richard-russell-12-t ... new-normal