This entry will offer a well known financial adviser’s insights in excerpted and abridged from. I want to put down some of this individual’s advice, in its vintage form, while he is still with us.
I will also offer a brief anecdote about my observations of war veterans, and the post WWII generations, and human resiliency. My favorite financial adviser reading is always from Richard L. Russell who is now 86, and is just recovering from a ruptured appendix.
In times past I performed some many hundreds of surgeries for anything ruptured in a human abdomen, and then accompany the patient through the usual 8-12 week full recovery, which is typical of most uncomplicated abdominal surgeries. Russell was in the ICU for a couple of days during his hospital stay, and he was able to post his Letters with assistance from his wife Faye. He’s about 2 weeks post op now, and his Letters are back to their usual form and verve. That is evidence for an impressive recovery, considering his age, his surgical condition, the ICU stay, and his prior medical conditions, including prior stroke events, from which he has fully recovered.
People who are used to the practice of their own human resiliency, self reliance, and internal resourcing, and who are endowed with a passion to live and express their great gifts, will always go forward to throw the seeds and fruit of their lives into the soil and onto the tables of humankind and Gaia. Others may melt and wither, but many are strong, and are well intentioned. These are the true community leaders, the wise ones who bestow their gifts.
My hope for our future evolution as a peaceful race of humans lies with the gifted and strong Gen X group. They have not discovered their strength, yet. I attempted to express my fondness for Gen X in the May 7, 2009 Crestone and Beyond entry entitled “Gen X to the Rescue!” I hope that you will review this entry. There is nothing that I would change about this older entry except to break up the paragraphs and make them shorter.
If you are lucky enough to know any WWII vets who went through the heavy stuff, like Russell did, you are not surprised at his perseverance and dedication to continuing the daily Dow Theory Letters offerings, while recovering from abdominal surgery in an ICU.
In the past 65 years, I feel that we have “decultured” much of what this generation brought through the Great Depression and WWII and delivered up to us Baby Boomers, Gen Xers, and the next generations. They bestowed us with the subsequent boom times of the 1950’s. This is when petro derived “wonders products”, fast foods, fast living, and consumerism began to hold sway and dominate American consciousness. Television was spawned in every home, and all forms of consumerist propaganda were unleashed.
Do we have the indomitable spirit of this aging and dying generation, called The Greatest Generation? We will soon see how strong we are. There is much strength out there, I feel. There will have to be.
Those born in post WWII America have not been through anything that resembles the overall composite of the Great Depression and WWII.
Our current American culture has not been tested as a whole. Those who fought in Korea, Viet Nam, the Gulf Wars, and Afghanistan have known severe hardship and trauma. I have worked with Veterans from all of the aforementioned conflicts, and assisted with their trauma resolution.
These brave Souls, and those of us who did not serve in military conflict, must arise in a new fellowship now, and bring forth our best for the sake of our future as a peaceful race of Beings, ready to enter into fellowship with all of Gaia as well as all spiritually evolved intergalactic civilizations.
The human race is currently very technologically dangerous, and is also very spiritually adolescent. These 2 features are incongruent for a peaceful outcome.
These American war Veterans were thrust into wars contrived by conflicted and corrupted old men. These are the wars of old men. These old men are not respectable. They could become respectable if they were to renounce their prior meanderings and misuse of socioeconomic, and geopolitical, and military influence, and then come forth with a new sincerity and compassionate creativity to mold and forge a new world.
What would it take to transform them and their industries from destructing Gaia to assisting Gaia?
It will take an amazing change. It will require some sort of revolution of our consciousness from savage to peace loving people. The revolution word is loaded, and the revolution that is non violent is best, as has been shown by martyrs Gandhi and M.L. King.
An extreme form of revolution is the type alluded to by Thomas Jefferson in his statement, “The tree of Liberty must be refreshed from time to time with the blood of Patriots and tyrants.” Historically, this has been the prevalent form of revolution. The peaceful form of non violent revolution has been rare, but it is effective.
As to which form of change we will be entangled with will depend on peoples’ level of consciousness, patience, tolerance, and perceived level of threat.
When they should have been nurturing peace and global harmony, the old men went astray into fabricated delusions of their sense of power and desire to imperialistically manipulate the global map and hierarchy. This is the origin of the Frankenstein experiment fostered by Bush I, called The New World Order (NWO).
Here is a piece about Richard L. Russell that I procured from a web source. It an accurate quick thumbnail sketch of the man and his career.
“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.
The Letters, published every business day, cover the US stock market, foreign markets, bonds, precious metals, commodities, economics –plus Russell’s widely-followed comments and observations and stock market philosophy.
In 1989 Russell took over Julian Snyder’s well-known advisory service, International Moneyline, a service which Mr.Synder ran from Switzerland. Then, in 1998 Russell took over the Zweig Forecast from famed market analyst, Martin Zweig. Russell has written articles and been quoted in such publications as Bloomberg Magazine, Barron’s, Time, Newsweek, Money Magazine, the Wall Street Journal, the New York Times, Reuters, and others. Subscribers to Dow Theory Letters number over 12,000, hailing from all 50 states and dozens of overseas counties.
A native New Yorker (born in 1924) Russell has lived through depressions and booms, through good times and bad, through war and peace. He was educated at Rutgers and received his BA at NYU. Russell flew as a combat bombardier on B-25 Mitchell Bombers with the 12th Air Force during World War II.
One of the favorite features of the Letter is Russell’s daily Primary Trend Index (PTI), which is a proprietary index which has been included in the Letters since 1971. The PTI has been an amazingly accurate and useful guide to the trend of the market, and it often actually differs with Russell’s opinions. But Russell always defers to his PTI. Says Russell, ‘The PTI is a lot smarter than I am. It’s a great ego-deflator, as far as I’m concerned, and I’ve learned never to fight it.’”
Here follows some excerpts from the last 2 business day’s reports from Russell. These are some pretty good Russells, and are typical of vintage Russell.
The Dow Theory Letters by Richard L. Russell, excerpted, June 30, 2010
“What’s next? I think Washington will continue trying to spend us out of recession. This did not work in the past, and it’s not going to work now. The primary bear market will not allow it to work. But what if the Administration gives up and allows the forces of deflation and correction to express themselves?
Here’s where my crystal ball gets very cloudy. I don’t see Washington accepting another long, drawn-out recession or another Great Depression. The temptation will be too strong to try to print us out of the recession or to create enough government-sponsored jobs to drag us out of the recession. That’s what I see happening.
What would I have done? I would have done exactly the opposite of what has been done by Obama. Instead of promising prosperity and “back to normal,” I would have told the nation the truth. You’ve lived the great and unearned life for 65 years, all created by credit and borrowing, fun’s over. You must now pay for it with SACRIFICE. Americans must cut back to the bone. Children may have to move back with their parents, Americans may have to build “victory gardens” as we did during World War II. We’ll have to learn to save and crimp. If you want to buy a house or a car or a washing machine, you’ll have to wait until you earn enough to pay for those items.
Gold — Most people don’t understand the meaning of gold. People who buy gold today are thinking of climbing on the band-wagon and ending up with fabulous profits. Forget it, that isn’t why you buy and own gold. Besides, the government won’t let you show a profit in gold. The IRS will tax your ass off if you try to sell your gold mining stocks or your gold-related ETFs or gold funds.
The reason rich men accumulate gold is as follows. Gold is eternal wealth. Own three thousand ounces of gold, and you’ll always be wealthy. Holding gold entails no risk. Gold owes its value to its indisputable intrinsic value. You want to ensure eternal wealth? Pretend you have to make that decision, and it’s the year 1990. You load up on three blue chips, GE, GM and C. If you loaded up on these three, by now you’d be broke.
You want to feel wealthy in any kind of market or in any kind of political system? One way is to own physical gold. A great inflation materializes and your gold will probably rise with inflation. A great deflationary depression arrives. The price of everything crashes. And worst of all, that bubble that we call the dollar crashes as well. The dollar won’t buy a damn thing. Nobody will part with food or land or merchandise for dollars. All things denominated in dollars (stocks, bonds, real estate) collapse with the dollar.
Holding gold itself is a standard of wealth. You never sell your bullion gold. But when you buy gold mining shares, you are speculating on making a profit. If I own enough gold, I don’t care what the dollar the price of gold is. I’m a wealthy man as long as I hold my gold. If I own five Picassos I’m a wealthy man. If I own 20 acres on the Southern California coast I’m a wealthy man. But Picassos can go out of style. And land on the California coast can be confiscated. Not so with gold. Gold can be hidden, it can be accumulated, and it exists outside the system. By the way, I’m wondering whether great diamonds will soon be in that same category. I note that the price of great, high-quality diamonds is surging.
What man makes, man can destroy. The value or purchasing power of the dollar (fiat currency) can collapse. But gold cannot be devalued, because it’s not beholden to any man or any sovereign government. Gold’s value is based on 6,000 years of history, and its value lies outside the system. The US Treasury now values its gold as $42.20 an ounce. The world doesn’t give a damn what the US Treasury values its gold at. The world is saying that an ounce of gold is worth $1250 dollars, and the hell with the gold-haters.”
The Dow Theory Letters, by Richard L. Russell, July 2, 2010
“As we go on from here, it is critical that my subscribers fully understand the meaning of the primary trend and how this mightiest of all trends works. It took me years to understand and fully appreciate the true meaning of a primary trend (I learned it from my great Dow Theory mentor during the 1940s, E. George Schaefer).
(1) Primary trends can be likened to the power of the ocean tides. Build a sand castle against the ocean tide, and the first wave will wash your castle away. Build a cement wall against the tide, and in a matter of years the cement wall will be reduced to sand and rubble.
What I mean is that the power of the tide is relentless and irresistible.
(2) A second consideration is this. Primary bull markets don’t end with a whimper, they end in periods of excess and finally exhaustion. I compare the end of a primary bull market with two boxers in the final tenth round of their fight. They suddenly come to life, and give it all they have. The fight ends with both fighters totally exhausted. They have to be helped out of the ring.
(3) Primary bear markets, like bull markets, end in exhaustion. The traders, the pros, the retail buyers, the day-traders have been totally defeated. The stock market is smashed to smithereens. Nobody wants to play anymore. Deadness reigns. Great stocks lie at their lows, waiting to be picked off or accumulated. An atmosphere of depression reigns. The stock market is a monster, never to be fooled with again. Falling price/earnings have defeated the best stocks and the best stock-pickers.
A few great corporations are still doing well. Those who hold these stocks are puzzled or aghast. How could their carefully-picked great stocks collapse? At their high these stocks sold for 15 or 20 times earnings. At the bear market bottom (although the stocks are still doing well and making profits), they are selling for 6 to 8 times earnings. Collapsing P/E ratios have killed them.
(4) A fourth consideration is that primary trends, one way or another, go to completion. Or to put it another way, a primary trend will go to completion, no matter what. This is the concept that both market neophytes, Ben Bernanke and President Obama, have failed to understand.
I said from the beginning, “let the bear market fully express itself.” One way or another it will express itself regardless of the wishes of Washington or the Fed or the Treasury. Interfering with the primary trend will just drag out the situation and make it worse — it will be turning a menace into a Frankenstein. In the current case the Administration’s insistence on halting the primary trend has put the nation and coming generations in actual jeopardy,
President Obama thought he could “pull an FDR” and spend this nation out of recession. In this process, the Fed has financed his spending and stimuli plans to the tune of trillions of Fed-created “dollars.”
Finally, the US public has realized that the Obama strategy is not working, and that it was literally bankrupting the nation. The public screamed “Stop … enough … it’s not working, and you’re wrecking the country, throw out the Congressional bums.” And that’s where we are now.
Question — Russell, how do your studies of the primary trend affect gold?
Answer — The gold bull market will be no exception to my studies of the primary trend. Gold is indisputably in a great primary bull market. Gold moved into its second phase, the longest phase, and the one that starts to interest the crowd. But we haven’t seen the crazy third phase of the gold bull market yet. The third phase is the manic phase where everyone wants in and speculation grows to insane proportions. I believe the third phase of the gold bull market lies ahead, maybe six months to a few years ahead. There’s no way to time it.
Understand this — every item you buy, every trade you make, has a counter-party. I talked to a friend last night who was thrilled because he was heavily short the market. I asked him “Who’s your counter-party for all these shorts?” He answered, “What are you talking about?” I replied, “If you make a killing on the short side, who’s the counter-party, who’s going to pay you your profits?” My friend turned white, “Gad, I see what you mean. I don’t know who my counter-party is or whether they’ll even be solvent if the market collapses.”
And that’s where gold comes in. Gold is pure wealth. It hasn’t been produced by any bank or corporation, Thus gold doesn’t have a counter-party, nor does it need one. Gold can’t be devalued or thrust into bankruptcy. This is the fact that gold-haters seem incapable of understanding.
In a crushing deflation, most counter-parties are smashed. But gold stands alone it’s the “last man standing.” This, in a nutshell, is why sophisticated wealthy investors own gold. It’s the item that can’t be crushed in a deflationary depression.
Question — Russell, I give up. I concede that we’re in a bear market. But c’mon, how bad can it get?
Answer — According to Dow Theory, neither the depth nor the duration of a bear market can be predicted in advance. In this bear market, the Dow could fall to 4,000 or 400. I honestly don’t know the answer. In my experience, primary trend tend to carry further than anyone expects.
I do know this — yesterday the following broke below their June lows — the Dow, the Transports, the NYSE Composite (which includes ALL NYSE stocks), the S&P Composite, the NASDAQ and the Russell 2000. Any way you look at it, that’s bad action.
Maybe just as bad, new lows on the NYSE surged to 164. Hundreds of stocks are breaking down, and even more are hovering just above their 52-week lows. The lower depths of this market are opening up like a giant graveyard. It is said that in a big bear market, stocks return to their original homes — Wall Street.
Headline in the July 1 San Diego Union (article from the Washington Post) …. Most Americans Seeing Austerity as way of Life. The recession has directly hit more than half of the nation’s working adults, pushing them into unemployment, pay cuts, reduced work hours or part-time jobs, according to a new Pew Research Center survey.”
Russell Comment — As I said it would, the bear market is beginning to bite. And it will get worse as the stock market continues to probe the lower depths.
What to do? Stay as liquid as you can, get out of the stock market, get rid of all the debt you can, and own some gold. Don’t put your faith in the US dollar. The US dollar is the world’s biggest bubble. The dollar is only a convenience with which to buy what you need or to pay off dollar-denominated debts.
Sooner or later the US government will attempt to pay off some of its insane debts with dollars of its own (Fed’s) creation. That’s when the dollar bubble will burst. The world will no longer accept dollars, it will want gold.
One solution — the US Treasury holds a vast amount of gold which it values at $42.22 an ounce. Raise the price of gold to $5,000 and pay off our debts with gold. Can we get away with it, is it feasible? Do you have a better idea, like reneging on our debt? Or declaring sovereign bankruptcy? We’ll go the easiest and least painful route.”
Crestone and Beyond
“While your money still has purchasing power” are the key words in the last paragraph.
Do your utmost to pay off all debt. Don’t have debt.
And now, a requisite unpleasantry…You, and only you, are the person most qualified to defend your family and loved ones and your home. No one is more qualified than you. You have the heart, the mind, the spirit, and the body to do it. Do you have some basic training that will enable you to defend yourself, family, and home? Convert some of your money and time and desire and energy into learning self defense, and what you may be called upon to do if worst case scenarios supervene.
You will need a deep core Belief system that is your Identity. Do not depend on your old entrainment of an “outside God that is going to save you.” That “outside” God is actually your own inner Divinity. It is you. Get to know it. Your Identity Crisis is over if you can let go of disabling belief patterns that have you locked into fear and an immobility to move on. Have faith in your own Identity, and act decisively from Its Guidance. Have Faith in that, and make sure that you understand who you are. This is a spiritual issue.
Convert some money into hard goods that will enable you and your family and associated trusted loved ones to weather any form of a coming Hard Rain. Make good friends with those who have skill sets. It will be a Hard Rain beyond what the Greatest Generation experienced. You will watch it unfold in disbelief, unless your beliefs are already prepared. Don’t be caught separated from your family and resources. Try to get yourself and your family oriented onto a somewhat similar page now.
Money will lose more and more of its purchasing power as the years go by. I envision a 10 year window from now. I envision ongoing perpetual war being fostered and wrought as long as the military industrial complex, the petro-oligarchy, and the banking system remain in control of foreign and domestic policy.
You have time to understand this, and begin to initiate some kind of plan now. Get out of debt. Have enough cash liquid to weather a long emergency. How long of an emergency? I do not know. If it is over 1-2 years, then there will be growing chaos, martial law, and a reversion to subsistence living. Think of how your great grand parents must have lived, but without the chaos and martial law.
Start to establish your List of Lists for what you want to turn your money into. Then start refining the Lists.
Practice something daily to allow your body, mind, emotions, and spirit parts to be in order, and be well integrated.
Signing off from Crestone and Beyond.