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Quote of the Day

Wednesday, April 11, 2012

April 11, 2012 -- "The only cause of depression is prosperity." Clement Juglar



As matters stand the Republicans are opting for general cutbacks in spending or choice number 1 in Richard Duncan's just published book, The New Depression. Duncan is convinced that AUSTERITY is absolutely the wrong way to go. Austerity would be comparable to the Fed raising interest rates in 1928 (which brought about a fresh collapse in the US economy). Duncan believes "that in his option three the government could borrow and invest, and the government's investments would yield a return. In fact, given the magnitude of the resources that the government has available to invest, the returns that could be generated would be sufficient to restore the government's finances to health -- perhaps even making it possible for the government to repay all of its debt within a relatively short period of time. Duncan believes that the US could be the world leader in solar energy and biotech.


Russell Comment -- Thus, Richard Duncan is not completely bearish, assuming that the US government comes to its senses and does the right thing.

In other words, with the credit boom bursting and most of Asia producing goods at brutally competitive prices, this is most definitely not the time for the US to opt for austerity.


With Rick Santorum out, I think we're going to be dealing with President Romney. Unfortunately, Romney and the Republicans will almost surely vote for cut-backs and austerity in their eagerness to cut into the budget deficits.


The market is hinting that the economy is not going to appear appetizing at around election time. This means (I believe) that Obama will be getting his walking papers along with all his "kill the rich" slogans. The ball will then be in the GOP's hands.


Wait, if Obama does win he'll probably be dealing with a GOP Congress, which means that Washington will get nothing done. That's OK, because the stock market likes it when Washington has its hands tied.


Russell advice -- The future for investing is very cloudy, obscure and tricky. Most of what you hear from professionals is pure baloney. One problem -- We must be ready to take losses in all items denominated in fiat currencies (including the US dollar). For ultimate safety over the long pull, buy and own bullion gold, silver, and gem quality diamonds as well as collectible treasures. If you don't believe me on collectibles, check the prices they are going for at auctions (send for the Christie's and Sotheby's catalogues).




My PTI was up 6 at 6381. The moving average at 6367, so my PTI is bullish by 14.


The Dow was up 89.46 to 12805.39.


Transports were up 46.27 to 5134.40.


Utilities were up 1.18 to 451.02.


NASDAQ was up 25.24 to 3016.46.


S&P 500 was up 10.12 to 1368.71.


There were 2429 advances and 644 declines on the NYSE.


There were 38 new highs and 31 new lows.


Total Volume on the NYSE and associated exchanges was 3.76 billion.


Bonds: Yield on the 10 year T-note was 2.033. Yield on the long T-bond was 3.194. Yield of the 91 day T-bill was 0.091%.


Dollar Index was down 0.12 at 79.76. Euro was up 0.22 at 131.04. Yen was down 0.21 at 123.68. Currency Prices as of 1 PM Pacific Time.

June gold was down 0.40 to 1660.30. May silver was down 0.15 to 31.52.


May light crude was up 1.68 to 102.70.


My Most Active Stocks Index was up 9 at 289.


The Big Money Breadth Index was down 10 at 1020.


CRB Commodity Index was up 1.65 at 302.10.


The VIX down 0.38 to 20.01.


Permanent Portfolio Fund (PRPFX) was down 0.18 to 47.90 (previous day closing). YTD Return: 3.93%.


Late Notes -- They sold 'em off on the close again with the Dow up 86 just before the close. Dow now below its 50-day moving average

Dec. gold down half a buck but still above 1600.





Dear Richard,


Just renewed my subscription after a lapse of a few years, as basically I agree with your analysis so I figured your work was redundant. But now I’ve renewed as I saw your comment on Richard Duncan’s new book. Then I remembered your tout of his first book Dollar Crisis. Then I remembered after reading this book I loaded up on gold bullion (at about 350 an ounce.), and started buying rare and ancient gold coins which developed into a thriving business for me. I had forgotten I’d read Dollar Crisis on you recommendation. I’d like to thank you belatedly. And I’m happy to be reading your fine work again.



Jeff Kahn



PS I still think you’re crazy to live in San Diego.