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[ThatHawaiiGuy]

I'm Thinking
Richard Russell
Dow Theory Letters
Jul 23, 2003

Extracted from the July 22, 2003 issue of Richard's Remarks

-- During a "normal" bear market the excesses of the preceding bull market are corrected. The usual process is that people and corporations pare down or get rid of debt. But this time, due to the frantic machinations of the Fed, corporations, individuals and even cities and states have INCREASED their debts. This has put them in the worst position possible to withstand deflation.

In a primary bear market, the bear will attack the weakest link in the economy. The weakest link in the US economy now, I believe, is debt. The nation is in no position to withstand deflation. In deflation debt looms ever more difficult to carry. And this worries me no end. And I can guarantee you that it worried Mr. Greenspan.

So these are my thoughts for my subscribers.

First, get out of as much of your debt as possible. Forget those juicy mortgage terms, own your home outright if you can.

Second, pare down your stock holdings. If we get deflation, you won't need any stocks. In fact, you'll wish to God that you didn't own any stocks.

Third, get out of all bonds except possibly short-Treasury notes, maybe maturities of three years or less.

Fourth, rather than T-notes, I'd prefer 91-day T-bills which are just a safe form of cash.

Fifth, have some gold. First gold coins, and second gold stocks. If you have only one gold stock, I'd make it Newmont.

Question -- What about owning currencies other than the dollar?

Answer -- Great idea, if I knew which one to own. Personally, instead of searching around for a "better currency," I'd rather buy the one currency that can't go bust, and that's physical gold.

The recently strong currencies of the "commodity" nations, New Zealand, Australia, Canada, are now all declining. I'm not enamored of any particular paper currency now, so I'd just as soon stay in T-bills

-- and gold.

More follows for subscribers . . .

http://www.321gold.com/editorials/russell/russell072303.html


Conclusion buy gold on dips accumulate stupid amounts of silver...pray it goes back under 4.50....okay 4.75 then...