Zeev's Turnips Patch-No Politics (ZEEV)

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Richard Russell - Is Anything Safe In Our New World?

July 3, 2012

With continued uncertainty surrounding global markets, the Godfather of newsletter writers, Richard Russell, asked an important and intriguing question, “Is anything completely safe in our new world of central bank fiat paper?” Russell also discussed gold at length, but first, this is what Russell had to say about the action in stocks: “I wanted a mechanical way to follow the secular (primary) bear market. This required a moving average that was insensitive to secondary reactions and also insensitive to cyclical (short-term) bull and bear markets. In other words, I needed a long-term moving average that would portray the primary trend while screening out most minor and secondary movements.”

“After much experimenting, I came up with a 233-week moving average. The chart below starts in the year 1983 and continues to the present. The 233-week moving average is the curved blue line. (233 is a Fibonacci number: 144 + 89 = 233.)

If we are now in a secular bear market, then the 233-week moving average should trend mildly southward. Towards the end of the bear market, the decline in the moving average should accelerate as it heads down.



Russell also had this to say regarding gold: “Gold had been in one of the most fabulous bull markets in history. Each year since 2000 gold has ended higher (see list below) -- this has continued for eleven consecutive years.

2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00
2009 -- $1096.50
2010 -- $1421.40
2011 -- $1566.80
2012 -- ?

In 2011 gold ended at 1566.80 on the last day of the year. And I'm wondering whether gold will end this year above 1566. Gold is 1554 now, which means it will have to really ‘step it up’ if it is to surpass 2011's 1566.

If gold can't do it, is the gold bull market over? In my opinion, it is not over. I believe the gold bull market is still intact. If gold cannot make a new high in the year 2012, be prepared to hear the anti-gold element scream to high heaven that the gold bull market is over. They will be wrong. We still have not seen the third speculative phase of the gold bull market, but that phase lies ahead.

Gold surged 54 dollars last Friday, and from the looks of the daily chart below, gold has established strong support around 1550.00



Another question -- what about all the billionaires if fiat money collapses and becomes worthless? If fiat money goes down the drain, what happens to all those people who today claim that they are rich in terms of the millions of dollars they own? In other words, in many cases our wealth is dependent on the viability of fiat money. Is anything completely safe in our new world of central bank fiat paper?”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/3_Richard_Russell_-_Is_Anything_Safe_In_Our_New_World.html