decent advice re: margin from russell. also a nice update on the no bid contracts let for iraq. guess who pays? LOL! john buttfucked public.
Gold -- I've received a number of e-mails which ask the same question -- "Russell, if gold is in the early stages of a bull market" why are you only recommended 5% gold coins and 5% in gold shares? Why not load up now?"
And my answer harkens back to the 1970s. I was buying US gold coins (any other kind was illegal) in the early '70s at $60 to $70 a piece. At that time those few early gold-bugs that I knew were gung-ho for gold to move higher. But weeks dragged by, months dragged by, years went by -- and gold remained sluggish.
I had a wealthy subscriber at that time, Jay Pfister, a Swissman, and he was a big fan of gold. Actually, Jay was the man who talked me into leaving NYC and moving to California. I had another subscriber, ex-General Marion Cooper, former Adjutant General to Clair Chennault, leader of the famed "Flying Tigers." General Cooper was a founder of Pan American Airways, and incredibly the sole creator and producer of the seminal movie, King Kong. General Cooper was a fervent believer in gold.
So back in the early and mid-1970's we all waited and waited and waited -- for gold to rise. Months went by and -- gold went nowhere. So what in hell was wrong with gold? Then it happened -- gold started to take off. Sadly, both Pfister and Cooper died before the great gold move of the late-1970s. How I wish that they could have seen that spectacular rise.
But I learned. Because that waiting taught me the truth of the old Wall Street saying, "The market always does what it's supposed to -- but never when."
William Hamilton, fourth editor of the Wall Street Journal and one of the founders of Dow Theory, wrote, "The graveyards of Wall Street are filled with the bodies of men who were right too soon."
And that's why I say, 10% of your assets in gold at this time is enough -- at least enough for my average subscriber. I don't want subscribers staying up at night listening to the radio for news of gold. I don't want subscribers pulling their hair out because gold or gold stocks are not surging. I've said that subscribers should take a total 10% position in gold and then "forget about it."
Ultimately, the dollar will head south in earnest. With a budget deficit of over 5% and a trade deficit of 5% or more, no currency can hold up in international markets against those odds. In time I expect to see competitive devaluations among almost all the major currencies. The international export business is a vicious and deadly serious game. Nations receive an export advantage if their currencies decline. The temptation by nations to degrade their own currencies will be too tempting to resist. Gold will have its day. |
