“I feel that it’s time to be increasingly careful regarding the stock and bond markets. Consider this: Since its 2009 low, the main stock averages have doubled. So does it really make sense to buy stocks in an area where the stock averages have doubled, and where the Dow and the S&P sport dividend yields of less than 2.5%? It’s true that money managers are desperate to create some income, and they are forced to deal with the only place where there’s action.
But that is not true of you and me. We can enjoy the luxury of sitting safely on the sidelines while the markets wobble to and fro. In the meantime, gold is a hated item. Sentiment towards gold is comparable to sentiment at a bear market bottom. Therefore, if you have to spend your money, I prefer gold at this time to stocks and bonds.”
“At any time in history, there is a great and all-encompassing THEME. And I’ve wondered what the theme of today could be — what is the great theme of our times? I grew up in different times during the ’30s and 40s. The theme of my youth was — stop the dictators, Hitler and Mussolini, from taking over the world.
89 Year Old Richard Russell
This is what I believe the theme of our times is. We are in a period where the “haves” are determined to hold on to their positions in the world. The “haves” include the world’s leaders and politicians, and the world’s “masters of the earth,” which includes those who control the world’s money.
Those who control the money make the rules, and their main aim is to remain in power. Currently, the various central banks control the creation and the issuance of money. To ensure that they remain in power, the central banks are spewing forth a veritable avalanche of fiat currency, money created out of a computer — money that has been created out of “thin air.” In turn, we are supposed to bow down and thank the money creators, those who are saving us from a new world depression.
At this time, although no banker will admit it, we are experiencing an international currency war. Every nation wants a cheap, competitive currency. It’s a system better known as “beggar thy neighbor.” Further, here in the US, the Federal Reserve has driven interest rates down to almost zero.
The zero interest rates are calculated to force people into equities, or better still, into housing. The average man has little or no savings, and if he does have any savings, he can’t find any place that will take his money and produce an income.
In this whole process, debt has been created to an extent never seen before in history. So far, the debt has been managed with super-low interest rates and borrowing. But the compounding process goes on, and the debt mountain continues to grow. So, to be brief, I see the theme of today as the “haves” doing whatever they have to — to remain in power.
The dangers in the background for the haves are the possibilities that (1) interest rates will begin to advance, and (2) inflation will rise and be so visible that even the common man will recognize it, and begin to protest, or even revolt and (3) the whole debt structure will rise so high that it will topple over of its own weight and take down the entire world economy with it.
So to sum up my search for a THEME, the theme of today is the “haves” remaining in power, and in doing so, also keeping the “have-nots” content and happy. Everything we are dealing with now, including stocks, bonds, real estate and possible sources of income revolves around the central theme that I have presented.
One further comment. The key to control by the “haves” is the production of fiat, unbacked money. Gold is the enemy of money created out of a computer. When gold was removed as a discipline behind money, those who could create money out of thin air discovered the path to riches and control. And they developed a hatred towards gold that was understandable.
Gold was the monetary discipline that stood in their way. This set off a long period of Fed-sponsored propaganda against gold. Gradually, through the years, and as generation after generation passed on, even the common man in America began to agree that gold was a worthless relic, a useless ornament to be despised. So this is what I believe is the theme of our times. It’s the control of our money by the modern “masters of the Earth.”
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About Richard Russell
Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.
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. Through Barron’s and via word of mouth, he gained a wide following. 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.
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