The Key Need – Income

Posted by Richard Russell - Dow Theory Letters

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Richard Russell has made his subscribers fortunes. One of the best values anywhere in the financial world at only a $300 subscription to get his DAILY report for a year. HERE to subscribe. Amongst his achievements Richard was in cash before the 2008/2009 Crash and he has been Bullish Gold since below $300

Ed Note: Richard Russell is bullish Silver and holds one of the largest single positions he has held since the 1950’s in the precious metals.


Today, nobody’s got any cash. And if they do have cash, they don’t know what to do with it. We just sold the house I’ve been living in for the last 30 years. And I wonder what to do with the money we’ll receive on the sale. Should I try to bring in some income? Or should I play it as safe as I can? Thirty years ago I wouldn’t have had this “problem.” I could have bought government notes or bonds and received safe income. Today I will wait with the money and see what comes up. But waiting with dollars is a risk, because I have no faith in the dollar as a store of value.

Maybe I should just say, “The hell with it,” and buy more gold. With T-bills at a negative yield, I’m not sacrificing anything when I buy gold — at least gold can’t go bankrupt. And great — gold is outside of the banking system. No damn fool can devalue gold. But I don’t trust the government to refrain from devaluing the dollar (after all, Roosevelt did it, and Obama seems to follow Roosevelt’s lead, although FDR was a conservative compared with O-bummer).

I watch what Bill Gross, master-mind of PIMCO, is doing. He runs the world’s largest bond fund, and he must think in terms of both safety and income. So what is he doing? From what I gather, he’s getting rid of US government debt and buying non-dollar bonds. Somehow, bonds of any kind don’t appeal to me. Gross likes the preferred of some banks, and that’s not a bad idea. But it sounds a bit risky and mysterious. After all, who knows what these banks will come up with next? I just don’t trust them, and I’m convinced they’re still loaded with toxic assets which they refuse to mark to market.

I think I’ll do what I’ve been recommending all along. I’ll sit with mostly gold and the rest in cash. Cash isn’t worth much these days, but it does allow you time to think. And best of all, and miracle of miracles, people continue to accept cash (Federal Reserve notes) for items of intrinsic value such has gold, silver, real estate, diamonds, guns, art objects, all items that should be worth something 25 years from now.

I’ve said this before. Up to now the goal in investing was to produce a profit. You hoped that whatever you bought could be sold in a year or so for more than you paid. I don’t think that way any more. I think in terms of how I can avoid losing purchasing power. It’s a true reversal — from how to win it — to “how not to lose it.”


The 85 yr. old writes a market comment daily since the internet age began. In recent years, he began strongly advocated buying gold coins in the late 1990’s below $300. His position before the recent crash was cash and gold. There is little in markets he has not seen. Mr. Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974.