Richard Russell

Some number of random thoughts all making sense within my fevered brain.

 

For the last two years or so I have predicted we will not see an uncoordinated crash of the euro, but rather a coordinated fall of multiple currencies US$, Euro, Yuan, Pound, Yen.

They all are/were in big trouble, but none of them could act on their own unless they wanted to expose themselves as bankrupt.

If they default, the banking system collapses.

If they inflate on their own, their holdings move away, so they had to find a way to inflate at the same time, so that the currency pairs don't reveal the problem to the public & since people are convinced that inflation is about prices, it all needed to go in sync.

Now, they‘ve done the first step to coordinate their printing presses.

Essentially all the big currencies on the planet are increasing the money supply in a linked fashion, keeping the currency pairs stable, devaluing the savings, keeping the banks afloat, keeping the system running.

If this is successful, the predictions of libertarians claiming the system will destroy itself by inflation will not come true.  We shall see.   Richard Russell

 

 

No portfolio is perfect or without risk.  Yet, too often we think of risk narrowly and ignore the greatest risks of all in the form of monetary collapse, social disorder, regime change, and emergency edicts.

Warren Buffett disparages gold because it has no yield.

The reason it has no yield is that is has no risk. Yield is what you earn when you take risk.

Gold has no credit risk, no currency risk, no maturity risk, indeed no risk of any kind. It is just gold.

In contrast, Buffett's Berkshire Hathaway stock when priced not in dollars but in ounces of gold has declined in value by about 75 percent since 2000 from 280 ounces per share to 70 ounces per share.

Put differently, someone who bought gold rather than Berkshire in 2000 could today buy four times as much Berkshire stock using the same gold.

There has been similar appreciation in the value of fine art. Admittedly this is a selective example. Yet it is true that over centuries it is the hard assets not the paper assets that retain value through collapse and catastrophe.

The old money knows this ... they have seen it all before.   James Rickards

 

 

I guess two things stand out to me.  The first is it’s amazing how much complacency the various central governments can buy with the liquidity they are pumping into the market. 

You have the situation in Spain, which is looking like Greece on steroids, and nobody seems to care because of the liquidity coming into the markets.”

“I’m too old to wish for chaos, but it’s coming.  I think the market’s response to situations that make otherwise rational people seem nervous, is fairly amusing.  What we are seeing right now is the rising tide of liquidity floating most ships, particularly the conventional ships.   Rick Rule

 

 

“For every one person these days who dies fighting in US wars around the world, 25 other soldiers kill themselves. Veterans are killing themselves at a rate of one every 80 minutes. There are more than 6,500 veteran suicides every year. That’s more than all the American soldiers killed in Afghanistan and Iraq in the last 10 years, according to a New York Times analysis. Being a veteran apparently doubles your risk of suicide. Economic conditions wrought by government policies around the world have contributed to the death toll.

 Europe is undergoing an epidemic of suicide in countries seriously hurt by the downturn. In Greece, the suicide rate among men increased more than 24% since the disaster hit. In Ireland, male suicides have shot up more than 16%. In Italy, economic-motivated suicides have increased 52%...

Life is hard enough on its own. Government makes it harder. Its recession-causing policies; its policy responses that do not work; its regulations that makes people crazy; its poverty-inducing taxes and inflation; and, most of all, its wars, have driven millions to despair. Why the state in particular? It all comes down to the sense of having control over your life. The essence of statecraft is the absence of choice and the inability to escape. Many operations of the state try to disguise these features…

The faces of people in line at the DMV, the sauntering mass in line to be screened by the TSA and even the blank stares you see in the post office lines. There is something about state policy that demoralizes us all. That takes a toll on our health and our outlook on life and even leads to tragedy.   Jeffrey Tucker

 

 

There are 240 million voting age Americans. About 130 million will likely vote in the 2012 election based upon recent voter participation results. This means that 110 million Americans don’t give a crap about who runs this country or they’ve come to their senses and realize our votes don’t matter. Between 1840 and 1900 voter participation ranged between 70% and 82% as Americans took their civic duty seriously and believed their vote counted.

Since 1913, when the politicians relinquished control of our currency to a private bank controlled by a small group of powerful men, voter participation for President has ranged between 49% and 62%. It hasn’t surpassed 57% since 1968. Now that corporations are people and our candidates are selected by a few rich men, the transformation from a republic to a corporate fascist state is almost complete…

There are high paying good jobs in America, but there aren’t many and on-line college graduates from the University of Phoenix aren’t going to get them. The highest paying jobs today require a high level of specialization and education, especially in the healthcare and technology industries. This disqualifies the vast majority of government run public school graduates…

The conversion of our country from making high quality things other countries needed to a debt driven service economy of paper pushers, hash slingers, and retail ‘specialists’ has slowly but surely destroyed the middle class. The masses are distracted by the latest technological marvel that allows them to waste another two hours per day posting how they feel about the latest episode of America’s Got Something or America’s Top Whatever. We have become a country that glories in our materialism and shallow culture while acting like a thug around the world with our unparalleled military machine…

This result is not an accident. It was set in motion by the actions of a handful of rapacious, wealthy powerful men that have been calling the shots in this country for the last hundred years. It wasn’t a planned conspiracy but the logical result of man-made inflation, a fiat currency not backed by gold, the craving of rich men to become richer, a willfully ignorant populace, and a slow devolution of our society into a corporate fascist state. We praise and honor psychopathic criminals while scorning and ridiculing the middle class workers that built this country. The American dream has become a nightmare for the millions of unemployed and underemployed. The acceleration of debt accumulation and money printing guarantees this rotting carcass of a country will go belly up in the foreseeable future.”    Jim Quinn

 

 

“A decent man is too busy — improving his business, his home, his family — to take much interest in politics.  Besides, he knows it is a flim-flam.  He’s seen how hard it is to make any real improvement at home, even when you are close to the facts and on the job full time. Imagine trying to improve things far away, where you don’t really know what is going on! 

An honest man knows better than to interfere in other peoples’ business. His own business is tough enough.  He cares deeply about the things around him...and tries to make his world better in every way he can.  But he would be embarrassed to pretend to solve other peoples’ problems.  Even if he is only offering advice, he does so reluctantly...carefully...and tentatively.

If he is smart he knows that you can’t really make things better by bullying and threatening people. An economy works best by doing the one thing that the fixers can’t allow — letting people make their own deals, find their own jobs, and solve their own problems. It’s the one thing the fixers can’t do, and the one thing every candidate regards as political suicide — just getting out of the way.”   Bill Bonner

 

 

“To the establishment media, the race for the Republican nomination is over — Mitt Romney is the presumed winner.  Every globalist on the Republican side has come out and endorsed him — including those who don’t want him as president.

This reflects the concern Republican kingmakers still have about Ron Paul, who will now make a better showing than ever at the polls, due to the anti-Romney feelings among many conservatives and the growing anti-war sentiment.  

What is disturbing to the PTB is that Ron Paul continues to rack up delegates far in excess of his showing in primaries, which were not binding. ..... Huh?.....  However, I think they will pull out all the stops to keep a brokered convention from happening and make sure that Romney wins on the first ballot at the Tampa convention.”   Joel Skousen

 

 

"In bailing out the banking system, central banks have put their money on the wrong horse since banks are almost completely disconnected from their true role as a tool of the real economy. The labyrinth of complexity and intentional opacity is designed to hide this fact.

Real credit is shrinking throughout the system, but synthetic credit is alive, well and flourishing. The financial system now exists to its own exclusive benefit."   Jeffrey Snider 

 

 

To quote Richard Russell

 

From today's installment of Richard Russell's Dow Theory Letter.

 

Below are the last day of the year quotes for gold.

2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00 

2009 -- $1096.50
2010 -- $1421.40
2011 -- $1566.80

This year's close for gold marks the 11th year for higher year end gold closing.

To my knowledge this is the longest bull market of any kind in history in which each year's close was above the previous year.

This fabulous bull market will not end with a whisper and a fizzle. I continue to believe that the upside gold crescendo of this bull market lies ahead.

We are watching market history.

 

Richard Russell makes it simple

 

More than once now, I've plugged Richard Russell and his fine site Dow Theory Letters.

As though he needs it.

The following perfectly simple explanation of how to read a chart, perfectly illustrates his value.

 

Question -- Are charts really of any use?

Answer -- You might as well ask the question, "Are maps of any use?" And the answer is "Yes, both charts and maps are useful with one caveat, you must know how to read them."

Let's take a current example. Below I show a daily chart of the Dow going back three months. The first thing I see is that long blue ascending trendline. It continues higher until it hits what I call a consolidation box. The box is defined by a horizontal line at its top and another one at its bottom. So far, the Dow is "caught" in the middle of the box; it hasn't broken out to the upside or the downside. 

Then I see the red arrow at RSI. The arrow points to RSI heading down. Next I see another red arrow at MACD at the bottom of the chart. Here we see MACD rolling subtly over. In both cases, RSI and MACD appear to be ready to sink lower. This suggests that the Dow will break out below the box.

 

 

 If the Dow does break below the box, where is it likely to stop? The first support appears to come in at around 10800 on the chart. That is where the last decline halted when it touched the rising trendline. Often, moving averages will provide mysterious support and resistance levels during advances and declines. Today, the 50-day moving average for the Dow comes in at 10671. This should represent a resistance level on the downside. Below that we have the 200-day MA, which comes in at 10523. 

And that's the valuable information this single daily chart of the Dow provides us with. So are charts useful? Do they serve any real purpose? I'm convinced that they do. But like an explorer with a map, you have to know how to use charts.

 

Piece of cake.

 

A Trillion Seconds

 

This one has been going around for a while within a number of different presentations.

Having seen it again this PM at Richard Russell's Dow Theory Letter, and lacking the energy to work up any of the other ideas I have percolating, I decided to grab it.

As the great Vince Lombardi almost said,

"Fatigue makes mooches of us all."

 

Our elected officials are charged with dealing with our national deficit.

Now measured in the TRILLIONS of dollars.

Very few elite mathematicians are able to comprehend the impact of TWELVE ZEROS.

Instead of DOLLARS, let us imagine SECONDS of time:

ONE MILLION -------- 1,000,000 Seconds. ------ 1.65 WEEKS

ONE BILLION -------- 1,000,000,000 Seconds. ------ 31 YEARS, 8 MONTHS, 15 DAYS

ONE TRILLION ------ 1,000,000,000,000 Seconds. ----- 31,710 YEARS !!!

 

Reading on a Saturday Morning

 

To quote Richard Russell one more time,

 

 

 

 

 

 

 

He goes on to say something about denial, the NYSE, the administration, the Fed and clueless newspapers.

It all seemed redundant.

But then ...

He hits his stride.

 

 

 

 

And since we're on the subject of jokes .....

 

Richard Russell has a very good question

 

I have for a long time now read people who read Richard Russell.

Bonehead!!!

He's well into his 80's now and his Dow Theory Letters isn't cheap.

Still, the more I read him the more I wish I had been doing so all along.

 

"If I told you I was going to give you a large steel box for your kids,

and that box was not to be opened for fifty years,

would you rather I put three million in cash in that box,

or three million in diamonds or gold?"

 

Helluva question ain't it?

 

To quote Fred Fenster

 

"This is very bad."

 

Among those things slowing down my posting lately, is the following quote by Richard Russell who has written and published the Dow Theory Letters for many years.  This quote is the first questioning I've seen from a serious, well respected, and heavily followed source of President Barack Obama's competance.  

Criticism of Obama, up until this instant have always been proceeded by qualifiers having to do with The President's obvious intelligence, communication skills and his seeming niceness, before fault finding on his specific policies could begin.  

 “I've been thinking about President Barack Obama and the nation's problems. My conclusion, in all honesty, is that Obama was unqualified for the job. Unlike Reagan, Obama had no deep-seated convictions about anything other than he would spread the wealth and go down in history as the people's hero.

 “When it comes to economics, I'm afraid that the President is lost. It's all so clear now that we can't spend ourselves back into prosperity, although some dour souls insist that we are spending ourselves into virtual bankruptcy. Even the American public understands that, but the prez doesn't.

“On economics, Obama is a rank amateur. He thought he could listen to a collection of name-economists and come up with the right answer. Unfortunately, Obama listened to the former head of the Princeton economics department an erudite young man named Ben S. Bernanke. Ben was considered to be our reigning top-expert on the Great Depression. Bernanke's solution to the whole mess was simple -- first save Wall Street and then release a massive amount of liquidity into the system. If there wasn't enough inflation in the system, then flood the system with liquidity and hopefully inflation will return. Anything to hold off dreaded deflation.” Richard Russell, Dow Theory Letters, 01-26-10

 

 Up until this instant, while it had been OK to question The President's competance at the bar over a beer, in the elevator, or over the telephone while sitting there with your feet on the desk,  no credible public source had felt the need, or found the stones, ... take your pick, ... to question the man's abilities.

 Now comes the following from The Wall Street Journal. 

 
 
 
Now, ........ right here is where I get way slowed down.

My opinion and my fear is as follows; what we have here is a fairly smart, good looking, half black guy who has been blessed with a mostly free pass on the basis of all of the above, that has run into the first real adversity of his adult life as .........


PRESIDENT OF THE UNITED STATES OF AMERICA.


If indeed this is the case, I think you'll agree with me.
 
 
"This is very bad."
 
 
My hope here is that rather than taking another pull on his own jar of cool aid, the President demonstrates sense enough to at least wonder if maybe he's part of the problem.
Which brings me to my dilemma, my strongly held opinion is in conflict with my hope for this country.  Do I restrain myself and in so doing avoid in the tiniest, most miniscule, nano and inconsequential way (let's face facts, the readership here is somewhere south of everybody anybody has ever heard of) the application of additional pressure on a guy I'm already afraid is gonna melt like a popsicle on an August sidewalk?
 
Orrrr ... ... ... ... do I take my shot, and pile on? 


In a nutshell who prevails, good Roany, or evil Roany?
 
 
 
I believe you have your answer.
 
 

 

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