Richard Russell - This Is What Americans Are Doing To SurviveWith continued chaos and uncertainty in global markets, today KWN is publishing another incredibly important piece that was written by a 60-year market veteran. The Godfather of newsletter writers, Richard Russell, discusses gold, silver, what Americans are doing just to survive, and what he’s learned after nearly 90 years on this Earth. He also discussed the difference between the Great Depression and the Great Recession.Russell:
“I get the feeling that Main Street America is really hurting for cash and income. One of the easiest expenses to cut out is a magazine subscription. I subscribe to many magazines and I get the feeling that their subscriber lists are dropping off sharply. I’m getting amazing, almost irresistible offers to resubscribe. Gentleman’s Quarterly is now offering an incredible three years for $20.
Creeping food prices are pressing America’s population to the wall. Lower income, unemployment and rising prices are a vicious combination which we are seeing now. It takes large savings to allow a person to enjoy peace of mind, and to simply watch a dangerous stock market. And with near zero interest rates, it becomes almost impossible for the typical American family to save. Joe Sixpack notes that bankers’ bonuses on Wall Street are bigger than ever. I’m very much afraid that this will lead to trouble. Millions of unemployed Americans, disgusted and living on food stamps will force major changes in our economy.
In my almost 90 years of living on this earth, I've learned a few things. One of the least appreciated aspects of living is peace of mind. As I've said many times before, fear is the curse of mankind. Look at the shelves of any large drugstore, and you will see dozens of bottles of preparations and pills to cure anxiety, sleeplessness, fear, headaches and pains of every type. Mankind is awash in fears. Peace of mind is a rare gift.
In the investment world, of course, peace of mind is a particularly rare commodity. The rise in the stock market since its 2009 low has now exceeded five years. Common sense tells us that the longer an advance continues, the nearer it is to its conclusion. In the low area of 2009, fear was the dominant emotion. As the advance pushes into its sixth year, fear has given way to boldness and greed. On this thesis alone, I have elected to move out of common stocks. After long consideration, I have concluded that the area I prefer to be in is pure wealth.
By pure wealth, I mean physical silver and gold. That's my best advice for subscribers today. There are a number of metrics that suggest that this market is expensive, extended overloved, and long in the tooth. Margin debt on the NYSE is at a record high. When investors are extremely bullish and greedy, they borrow money.
Thus new market highs and record margin debt suggest an extreme in greed and bullishness. Aside from that, insider selling is high. There are currently seven distribution days on the NASDAQ and three on the S&P. These items alone are enough to place me on the sidelines. You might do the same. By being out of the market and on the sidelines, my subscribers should obtain that elusive state, peace of mind.
In the current times, when everybody owns a cell phone, everybody knows everything. This is one major difference between sentiment during the Great Recession and the Great Depression. In the Great Depression the investing public was generally confused, clueless and helpless. I know because I’ve lived through both periods.
…I'm just as happy staying with my physical gold position. I can't get over the fact that we can still buy constitutional money (gold and silver) with the junk fiat garbage that is being created monthly by the Fed. We're dealing with a phony, manipulated stock and bond market, but as Jesus said, “Seek and ye shall find ... Seek and it shall be given to you.”
I have no doubt that ultimately, the truth of the US economy and the stock market will emerge. And as Jesus said, further, “the truth will make you free.” I have no doubt that the Fed's manipulation of the markets will have its dire consequences. Men have given their lives so that we may remain a free country. Manipulated markets in a free country are an anomaly and a curse. But I have faith that America will survive.”
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