RICHARD RUSSELL: 12 TIPS FOR THE NEW NORMAL

Few investment legends have weathered more than Richard Russell.  Born in the Great Depression, Russell knows what it’s like to live in hard times.  And in this new normal he has some survival tips.  The following are courtesy of Russell’s Dow Theory Letters:

1 — Be a skinflint. Cut down on your spending. And be very nice to your boss, assuming you still have a job.

2 — Think in terms of NOT losing money. Forget about easy Wall Street profits. There aren’t going to be any easy profits — not without a huge new infusion of borrowed money.

3 — Be sceptical of everything you read. The media is desperate for circulation, and it will slap on the cover of its magazine or newspaper any damn fool statement that it thinks will sell.

4 — Have faith in your gold. As confidence in the whole monetary system slowly fades, the desire for gold will heighten.

5 — Remember, there’s often a large correction prior to the final speculative gold run.

6 — This time there may not be a “final gold rise,” because large interests may just decide never to sell their gold. They’ll keep their gold as a symbol of “eternal wealth” that can’t be destroyed of go bankrupt.

7– Check out carefully the Permanent Portfolio (PRPFX). So far, it has done well and held up well. It’s actually up so far this year, which is extraordinary. YTD return is 7.33%.

8 — Be very cynical about those “fabulous” money-making ads you hear on TV. Money is hard to make these days and risk in just about everything is high.

9 — Cut out expensive discretionary spending. Instead of eating at your favorite local restaurant, eat home and save many bucks. Supermarkets now stock endless “heat up” frozen dinners. Or better still, starting from scratch make your own dinners. Cooking is coming back.

10 — Take the long view. With stock dividends below 2.5%, the odds are that holding stocks “for the long run” is going to be discouraging or a loser.

11 — Money is made in the BUYING. When you buy anything at the right (low) price, the odds are that you’re going to make money through the passage of time.

12 — Wall Street is suffering. When the Street suffers, its natural tendency is to come up with new “ideas.” The ideas are usually risky (i.e., mortgage-backed packages). Be very sceptical of new Wall Street ideas and products.

Source: Dow Theory Letters

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Alan

    Wow.

    Was tip #13 “How to pick the best street corner for pencil selling?”

    Did you see this rumor/speculation? Merkel may ask Obama for a $1 Trillion dollar Euro bailout?

    http://www.businessinsider.com/merkel-will-press-obama-and-the-fed-to-bail-out-the-eurozone-2011-9

    I say we do it but for a Trillion I want that little T -shirt shop on the beach at St. Tropez for collateral. SOB’s making a killing….great view too.

  • http://hitormiss.yolasite.com/hit-or-miss.php Trixie

    Oh, HELL NO. And if we do, I DEMAND the GOP insist on offsets in our education, military, the elderly, infrastructure projects, elimination of the minimum wage, and the obliteration of ALL workers’ rights. Because “we’re broke”. Maybe this will turn their attention away from NPR and Planned Parenthood, and the $150M it will save. And when all else fails, blame gay marriage, because you know, that’s a huge money-saver.

    They started this conversation — our need to “fund” our spending — and I DEMAND we finish it.

    Put our people back to work! NOW.

  • http://hitormiss.yolasite.com/hit-or-miss.php Trixie

    This was in response to Alan and the link he provided. It’s ALL your fault internet!

    (Shakes fist).

  • Sherman McCoy

    Sounds like “12 Tips For Living Through A Depression(By Somebody Who Has)” RR is eminently qualified to talk on this subject – just don’t follow any of his investment advice, after all, he’s 90 and senile. I’m still smarting from his last “Buy Stocks” call at SPX1550 in Oct. 2007. It was on the cover of Barron’s. Talk about your great contrary indicators…

  • Nils

    Frozen Dinners might come back to bite you in the ass in healthcare costs ;)

  • Nils

    Pure speculation. The author probably dusted off his crystal ball.

  • Geoff

    I started reading RR’s letter in the 1980′s. He has never really changed his tune since then, if not before. At least he’s consistent.

  • ocean

    Three bullets on gold 4, 5, 6? Doesn’t MMT suggest having faith in gold remain inconsistent with the faith in taxed fiat? Sounds like Russel hasn’t read MMT and accepted that the theory suggest any “rational economic agent” gold holdings is simply risky speculation compared to holding and questioning the riskless fiat and treasury based monetary system.

    I really like #3 and apply it equally to what I read on zerohedge as to what I read on pragcap :-)

  • Dan

    But number 9 on frozen dinners is hilarious, no?

  • Dismayed

    This may, indeed, become the new normal if the Tea Party gains power. Balanced budget amendment anyone? How abour privitizing Social Security? Privitizing the pension system has played out sooo well in Chile!

  • Mountaineer

    1. Yes, be thankful to even be employed. Hold no greater ambition. Sit in your cubicle mumbling “But for the grace of God (and my benevolent employer) go I.”

    2. No, profits aren’t being derived from “borrowed money.” There is little private credit creation. Profits are being driven by deficit spending and capital investment, generally at the expense of wages and employment.

    3. And? This should be filed away next to “Don’t piss into the wind.”

    4. Yes, have faith in a shiny metal brick. Worship it, construct an intricate shrine in its honor. After the zombies arrive you can bludgeon them with it.

    5. Very important, after placing your entire net worth in the aforementioned shiny metal you shouldn’t sell, even if things begin to go horribly wrong. It’s just a test of your resolve. Even greater profits await for those with the fortitude to grasp ever tighter to their bricks.

    6. Gold has entered a “new paradigm.” It simply cannot fall. It’s eternal wealth, after all, and “eternal” means forever.

    7. Yes, place large bets on the fund that has dramatically outperformed the market over the last decade. Every empirical study says this is a tremendous idea. Also of note, trees have recently been discovered in the mesosphere.

    8. And? Probably a good idea to file this one alongside, “Don’t decide to tell your girlfriend ‘how you really feel about her family’ at 3 a.m. after consuming seven whiskey sours.”

    9. Yes, consume as much prepackaged food from the freezer section as possible. Don’t go out. When we all stop going out the economy will fix itself. Don’t question this, it’s magic.

    10. Please refer to #3 and #8.

    11. Please refer to #10.

    12. Except those coming from Richard Russel’s paid service, where he will draw squiggly lines on charts, datamine for utterly useless correlations, and generally underperform a dart-throwing monkey.

  • Patrick

    #3…Be sceptical of everything you read. The media is desperate for circulation, and it will slap on the cover of its magazine or newspaper any damn fool statement that it thinks will sell.

    Jump over to Business Insider and see this in action. The Inquirer headlines of each story have nothing whatsoever to do with what passes as an article. It is all about page views and the ad’s on each. I have never seen something so blatant. AOL was never this bad, ever!

  • Colin, S.Toe

    Trixie, you are probably too sane to be the Democratic answer to Michelle Bachman.

    But would you consider serving as Obama’s Press Secretary?

    Or perhaps in a future Mosler/Hickey/Roche/Beowulf/Fullwiler administration? (Draw straws to see who gets to be Fed Chair.)

  • Colin, S.Toe

    PS: The women in the current administration already produce more testosterone than all the men combined – with you in there, it would be no contest.

  • http://www.pragcap.com Cullen Roche

    Ha! Nice one mountaineer.

  • jjames

    i didn’t realize rachel maddow was posting here.

  • http://binaryoptiontutor.wordpress.com/ MMT Newbie

    ..or rolaids.

  • jjames

    defending the indefensible isn’t easy, but nice try.

    maybe you should your check ss account and find out how they’ve invested your money.

    and hopefully they don’t raise the retired age, eliminate more cost of living increases, and reduce benefits to many more times before you collect.

    i would rather manage my own 401k anyday.

  • VII

    Mountaineer-

    Too funny..well written…I’m going to read it again..

  • VII

    It’s funnier the second time

  • Bill Sundling

    Get completely out of the stock market if you can.

    Don’t buy a new car. Buy a low-mileage car instead.

    What happens first? a complete Euro-zone meltdown that takes out the world’s banking system? hyperinflation due to the trillions of bogus dollars being printed? Or will it be the loss of the dollar as the world’s reserve currency? I have a year’s supply of food and water, guns and ammo, and I’m in the process of buying kerosene heaters and kerosene. I have my savings in gold.

  • Mtguy

    Geez, not a lot of gold owners commenting here. As a non-gold bug, but a fairly long term gold owner I find it hysterical how those that don’t own like to ‘diss’ it. The time to sell will come, but it ain’t here now. Of course my bonds have also done incredibly well, but I get laughed at for them as well. Yes, the time to sell is nearing (bonds)… Keep competing with those that own the system and the HFT computers, I’m sure it will work out well for you.
    As for TV dinners -yuk, never had one never will. But his point is, now is the time to be frugal, not blow your last single dollar. People take life far too seriously -get out enjoy yourself (just in case the world does end soon :~))
    PS. Not related to Mountaineer, looks like we probably couldn’t agree on the route to take!

  • Willy2

    Excellent advice. I would add some more advice:

    13: Get out of debt and avoid margin/leverage.

  • tradeking13

    If we get a currency collapse, Mr. Russell, you better be invested in lead, not gold.

  • Different Chris

    I’m getting looks at work due to the loud chuckles emanating from my cube.

  • VII

    Thanks Bill..if things get bad I know where I should go to get food and water. I will hire some crazies to take your water, food and gold.

    Your years supply of ammo…well I will hire alot of people and you will go through your ammo quickly. This serves two purposes. 1. I don’t have to pay them.
    2. you use your ammo I get the gold and food quicker.

    “don’t let fear decide your fate” Awolnation.

    Bill-sound like a hoot to hang out with.

  • jack

    RR cannot be 90 if he was born in the Great Depression. If he were 90, he’d have been born in the roaring 20s. The Wall St. crash was in 1929, so the man must be 82 or younger.

  • zskevrqeyzhlil

    13. Befriend a blacksmith, that he might shod your oxen in time for migration season.
    14. Stocketh up on magic markers, that you might continue to write on drunken friends’ faces after the great collapse endeth the office supply store.
    15. Maketh friends, that you might write on their drunken faces with thy markers of magic.
    16. Planteth beans, as they are a musical fruit.

  • http://fiatcollapse.blogspot.com Misthos

    Chuckle all you guys want about gold. Here’s a question:

    How much does fiat weigh? (and don’t give me this, “Well gold is fiat too” argument. It’s not.)

    It’s actually a profound question – but few of you will understand it.

    Global Fiat is a failed 40 year experiment.

  • http://hitormiss.yolasite.com/hit-or-miss.php Trixie

    Pfft, Bachmann or Maddow? Please, child’s play. I’m insulted. The only real challenger I have is Face-Ripper Monkey from The Donner Party:

    http://www.youtube.com/watch?v=5lJXlaoAc4U

    Also, apologies for the snarky political comments. But I am beyond frustrated with our current political representatives and their inability to implement real solutions to real problems, sans ideology. Going forward, I will try to make more constructive comments, but please keep the bar as low for me as we do for our elected officials.

    See? I did it again.

    (Sobs).

  • VII

    Misthos-

    Chuckling cause it be funny. Don’t get so insecure about your gold.

    Keep your gold Midas. Keep buying more…It takes a greater fool to keep it going up. DON’T SELL.

    Yes.. there is nothing like a safe haven which has returned over 600% in the last 12 years. I always flock to assets that have gone up 600% in times of distress. There are so many ladies in the club and y’all keep focusing on the Missy Gold. Even though she’s never been good to you. In fact if memory serves me correctly she has left many for dead over and over again.

    But I know..in 2011 it’s just different. It’s a currency. One that the credit card companies will store and you can charge anything you want off of it. they’ll just chip off pieces after every transaction. The banks will love the ability to not lever up a hard asset.

    Man..if you gold whores only knew the guys I know who are selling this stuff to you. These guys couldn’t be in any other profession but the fear mongering one. Load up Midas…prove us wrong.

  • Different Chris

    Can you explain why the weight of fiat currency that’s value lies in the underlying product or service its used as an exchange mechanism for matters?

    As long as citizens of the sovereign issuer have a requirement to hold/use/operate in the fiat currency (like, oh… I don’t know.. they have to pay their taxes with it) there will be no hyperinflation (which is what you are de facto arguing).

    Gold has been a great investment over the past few years. Gold is perceived as many great things. But you can’t take it to your local gas station, grocery store, post office, restaurant, laundromat or.. well ANYWHERE and use it as currency.

  • Different Chris

    “Doesn’t MMT suggest having faith in gold remain inconsistent with the faith in taxed fiat”

    No. Have a good one.

  • Nils

    Osmium (22,610kg/m³) is even denser than Gold (19,300kg/m³). It’s a steal at 400$/ounce.

  • Different Chris

    Trixie,

    People might disagree with your politics, but if they disagree with your humor they’re just lying.

    Best

  • VII

    Nils-

    I’m a steal at todays price. My wife says I’m denser than Osmium and Gold.

  • lastmanstanding

    VII…weak people like you are the problem with our country. Don’t have the balls to stand up for yourself… I’ll send someone else, I’ll use someone elses money, I’ll take advantage of other humans.

    People like you will be the first to go…those that live your lives exactly opposite of how the earth works.

  • VII

    Weak people like me…

    Oh you mean the linebacker who played for the Miami Dolphins..
    All-American..team captain…started his own business..helps out his community…goes into crappy areas of L.A to help the drug addicts and poor.
    Buddy…and I mean this politely…if you were next to me you would not be the lastmanstanding….no one you knows me would disagree.

  • Mountaineer

    Cullen, VII, Dif. Chris,

    Glad to provide some levity. On a side note, do any of you care to explain how one would go about placing a picture next to your username? I believe I’ve seen the default image referred to as a “faceless pawn” before and I tend to agree.

  • http://www.pragcap.com Cullen Roche

    Go to the log-in page, http://pragcap.com/wp-login.php and scroll to the bottom on the user page. You can upload an image there.

  • Mountaineer

    That’s what I’ve been trying. The image appears in the box, I get a message saying “your profile photo has been submitted for review” and then nothing happens. The image doesn’t ever appear on my posts and the “for review” message never goes away from my user page. I’m not really sure what the problem could be, I’ve tried different images and nothing seems to work.

  • http://www.pragcap.com Cullen Roche

    Weird. Looks like the setting on that plug-in changed to require photo approvals. Oops. Should be fixed now.

  • Mountaineer

    Aha! Thanks Cullen! Now, off to find a better picture.

  • Different Chris

    Nothing like adding some personality! Great to see you ad a pic, I only did so about a month ago and chose to make myself look stupid. That way everyone would know what they were dealing with upfront :P

  • Different Chris

    @ #9 Canned tuna is cheaper by volume and has more protein per calories (my first measure of more energy effective nutrition) You will need to supplement with canned vegetables for vitamins and minerals.

  • Gordon Shumway

    Bernanke is a “Keynesian”. Geithner is a “Keynesian”. ALL of the “economic advisers” to The Big O are presumably also “Keynesians”.
    Today, this seems to mean that they believe that there is NO downside to governments creating unlimited amounts of currency out of thin air, a belief which is 100% contradicted by Austrian School economic theory and the tragic history of those nations which have tried it.
    Moreover, Keynes himself well understood this fact, as he details in his book on the Post WW-I economic situation, The Economic Consequences of the Peace, which begins:
    “Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”
    “Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
    From this we can only conclude that all of these “Keynesians” are in fact consciously embarked on a plan to employ “the surest means of overturning the existing basis of society”, following the precise blueprint laid down by Lenin and Keynes.
    Got physical silver?

  • szcgoyqfyfqdzm

    Gordon,

    Bernanke is a “Keynesian”. Geithner is a “Keynesian”. ALL of the “economic advisers” to The Big O are presumably also “Keynesians”.

    Bernanke is a sort-of maybe Keynesian, in the way that Milton Friedman’s monetarism is a sort-of maybe Keynesianism. Here are remarks by Bernanke at the Conference to Honor Milton Friedman, University of Chicago:

    Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.

    So, he’s of the opinion that the first best solution to nominal slumps are manipulations of short term nominal interest rates, followed by buying longer term, riskier assets if need be. So he’s basically a modernized monetarist, saying nothing different than Milton Friedman did about Japan’s slump, and being less ambitious than Friedman advised the Japanese to be.

    Geithner has a masters degree in international relations or something. Here’s an excerpt from the WaPo that reveals his role and philosophy in the administration:

    Even before the president had been inaugurated, Geithner had been urging him to set a target for the budget deficit that would require shrinking its size to 3 percent of the U.S. economy. At that level, the national debt would eventually become manageable.

    “From the earliest moments of the administration and even before, he clearly had a big focus on long-term deficit reduction and making clear, not just to the markets but for the entire economy, that the government is living within its means,” Goolsbee said in an interview.

    The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt.

    So no, Geithner is no friend to the consummate Keynesian. Which means you have no basis whatsoever for this claim:

    “Today, this seems to mean that they believe that there is NO downside to governments creating unlimited amounts of currency out of thin air

    There literally isn’t, at the moment, any downside to creating tremendous (but not unlimited) amounts of money out of thin air (except for people who benefit from poor growth) but neither they nor the president believe that to be the case.

  • VRB II

    Too funny…DC

  • szcgoyqfyfqdzm

    I would like to add something to this post: it makes me really, really scared that a Treasury Secretary – or a president of the NY Fed – could think that a 3% target for the budget deficit over any foreseeable period from a 2008-2009 vantage point would be a good idea, or even possible. It’s not just that it’s not Keynesian. I don’t see how it makes any sense or would even occur to a thinking person during the months before inauguration when the economy had been hemorrhaging millions of jobs.

    It’s nuts.

  • http://www.pragcap.com Cullen Roche

    Bernanke is actually a monetarist. Pretty big difference.

  • ocean

    Seriously – please read this from Mr Wray.
    http://neweconomicperspectives.blogspot.com/2011/08/responses-to-blog-13-modern-money-view.html

    Chris what is the deal, if you and Cullen want me to no longer comment it would be simpler to say so. Again when I see reality doesn’t match the monetary system I will question it.

    And comes off pretty weak response if the comment coming back is to go read more MMT, or calling me a fearmonger, saying I misrepresent MMT, saying I ask loaded questions, or reading everything I say as yields rising or hyperinflation arguement, claiming I have some personal agenda….do I need to go on. At this point I’ve lost patience from the constant abuse I get from you and Cullen when I comment about a disconnect between MMT and reality. Maybe I need to go read more MMT.

  • JWG

    “This may, indeed, become the new normal if the Tea Party gains power.” The left’s obsession with the Tea Party is hilarious. It reminds me of a similar obsession with the “John Birch Society” in the 1960s; remember them? If a few cranky white retirees and middle agers scare the left that much, the 2012 elections are totally in the bag for the Republicans. After the results in the New York special election yesterday, the Dems have lot more to worry about than the Tea Party, and that worry is named “Obama”.

  • http://fiatcollapse.blogspot.com Misthos

    You and the others don’t understand that we live in a world of limited resources. And wars are constantly being fought over these resources. You eggheads are great at explaining the current monetary system – and I honestly give kudos to you all for that.

    But geopolitics will kick in. The current system we have was not borne of academia or egghead debates – but of geopolitics – and strategic necessity. The current system is ending, and it will end badly. We will have a gold standard again. Not by design, but by default. It will be implemented as a geopolitical/economic weapon. And you eggheads can debate the merits of a gold standard all you want. Because that’s what eggheads do.

    You eggheads don’t understand that in this world, you have power or you don’t. And if your power is waning, then so is the value of your (weightless) future promises. As the system breaks down, and global distrust grows, something tangible, something real will be once again used to settle trade and currency values.

    So… make fun of gold all you want. Call it a shiny rock, barbarous relic, etc… Feel smart making fun of those gold bugs. But in the end, it will be you lot that look like the fools. You all hinge your pseudo intellectual superiority on a 40 year experiment that is nearing its termination.

    Just watch it all unfold. It’s unfolding right now… before your eyes, if you care to look up from your egghead treatises and theories and notice the real world crumbling around you.

    See? I can be an insulting, ivory tower egghead with a superiority complex too – and I still think gold will return.

    ;)

  • http://fiatcollapse.blogspot.com Misthos

    When the US sells its gold reserves and buys Osmium… I will do the same.

    Until then…

    Have you noticed what central banks are buying gold? Have you noticed the geopolitical plates shifting? Why has the US never sold its gold?

    It’s called geopolitics. Economic theories are not necessarily adopted because of an economist’s intelligence. Those theories are adopted to serve a nation’s self interests. Those theories are adopted to serve the influential interests.

    Awards to economists are actually Rewards.

    We live in a world of competing nations and blocs.

    You guys still don’t get it.

  • http://kellyannpope.com Kelly Ann Pope

    Henry Ford once said, “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
    If our money were backed by gold and silver, people couldn’t just sit in some fancy building and push a button to create new money. They would have to engage in honest trade with another party that already has some gold in their possession. End The Fed! …paper (fiat) creates inflation which equates to tax.. it’s all a scheme ..it is seductive to some & dangerous to most.. because most don’t know it is happening in the way in which it happening.

  • VRB II

    Kelly ann pope
    U went straight up, my space picture, CNN corespondent, Facebook on the TPC.
    watch out for some of these gold fear mongering I have ammo for 5 year crazies they may try and store u with there beans and water. It’s been along time since they’ve been around a female besides Betty the black labrador

  • Roger Ingalls

    I wanted to reply to so many here…

    1. I checked out PRPFX, mostly gold bullion/coins and treasuries. Seems pretty similar to the C Roche approach for the past year or so…, but he’s a bit cryptic in his positions. It’s not a bad way to invest in that combo, but the management fees seem a bit high (77bps), considering it’s simplicity.

    2. Mountaineer, you are one funny guy! Tip of the hat also to “planteth beans, for they are the musical fruit”

    3. It’s nice to see a few ladies (Trixie, Kelly) join the conversation (unless all you other guys ARE ladies, posing as guys). The only other gal that’s posted in a while that I can recall is Edith…, come back Edith…, (probably a guy too..!)

    4. VRB, and your aliases: Man, you are quick to engage in the online duke fest, but I like you anyways :), you kinda fling your persona onto the blogoshere, I respect that.

    5. Misthos, egghead is no longer considered an insult. Eggheads have won plenty of wars in the past, and will likely win even more in the future. It’s all a competition, and it’s all cooperation, mixing constantly.

    6. Finally, you can own gold and dislike it as a currency medium, just as you can own a tobacco company and not smoke. It’s called investing. Currently, gold is a horse to get you somewhere, then you get off that horse, and get another…

    I gotta get an avatar….suggestions?

  • Tom H

    Remember the Great Depression lasted way beyond 1933

  • Hans

    Nothing like a women with passion!!! Give them hell, Trixie!

  • Hans

    VII, where are you currently investing your assets?

  • http://kellyannpope.com Kelly Ann Pope

    @ Roger for the avatar go to http://www.gravatar.com .. It’s not about an investment.. It is about the fiat money losing value by the second.. Can you say insurance.. hedging .. exchanging cash trash for gold that will have value.. this is about the declining fiat currency.. not the price of gold.. (even though we all know where it is headed) lol … I don’t care about bull or bubbles.. they don’t belong anywhere in this … Gold has been a constant for years and always will be a safe heavan .. hope you have fun with your wheel barrow of cash to buy a loaf of bread.. And yes.. I am one beautiful, passionate female..

  • Different Chris

    Kelly,

    Please correct me if I’m wrong but you seem to be of the camp that believes the US is set on the road to Hyperinflation…. yes?

    If so, please send me any & all US Dollars you have. You think they are worthless and I would really like them. I mean, I know a lot of other people want them too, but I asked first so its only fair that you send them to me.

  • VII

    Misthos-

    “you guys still don’t get it..”
    “you and the others don’t understand we live in a world of limited resources…”

    REALLY??? What else do you think we don’t know.

    WHY DO YOU KEEP GIVING ME DIRECTIONS TELLING ME I’M LOST WHEN YOU DON’T KNOW WHERE I’M GOING!

    Do you think I read GMO and dismiss his limited resources stuff.. have you seen my posts on food, agriculture…

    Look..I think gold is an asset to buy but I also think it should be sold. My position is that it’s better to help the situation then to turtle up with your gold, ammo, and beans. That’s all. I don’t dismiss what history shows us about life.

    Life is not champagne and everyones a facebook friend, or linked in to business success. Life is tough. Theres alot of stuff going on. But the answer is not to tell people I’m a patriot…then tell ME or everyone who doesn’t agree with this gold thesis there wrong and the solution is to get ammo, gold and food for a year. OUR founding fathers never said this is the way. They didn’t become reclusive gold bugs. They went out and fought…got togehter, debated…and worked there ass off…blood sweat and tears with optimism. Often lives wasted hoeing dirt to make a better life. But they all did something. They didn’t just complain about it and blame everyone else.

    “NEVER ROB A MAN HIS BOTTOM..HIS CHANCE TO SEE THE LIFE AND HIS WILL DID NOT WORK..WITH OUT IT HOW CAN HE CHANGE”

    Go waist your life on this end of the world thinking. It’s your life. Just leave us alone who choose to live, help and struggle on daily basis to make sure what you believe never happens. Your doing everything you can to confirm your view. Were and many before us wake up every day to see what we can do to help.

    I’m don’t know you…don’t know how many people you help or touch. You could be the most giving thoughtful person in your town. So I dont’ have a right to extroplate to much here about you.

    Like wise…I’m well versed in Gold, and natural resources. Don’t assume or say to me …”what you need to..” “you still don’t get..” I’m not a child. I just act like one here sometimes.

    YOu don’t have to convince us of your Gold..trust me we get it. I own some…and I’ll sell it when the time is right. don’t worry about us…when the U.S ends we’ll be the ones outside trying to figure out how to put it back together. When were done…we’ll knock on your bunker and tell you it’s safe to come out.

  • http://kellyannpope.com Kelly Ann Pope

    Fiat money is a dangerous addiction. Even if the Fed found a way to stop inflation, as long as the current system persists the temptation will always be there to resume pushing the easy money button. Money lies & gold tells the truth..nuff said

  • Different Chris

    “Even if the Fed found a way to stop inflation”

    I certainly hope the fed never stops inflation. Low amounts of inflation are a good thing. Inflation is only a problem when it is beyond our productive capacity. Do you think the Fed should be working for Deflation?

    I am quite confused by your views and would greatly appreciate it if you would expound on them.

    “Money lies & Gold tells truth” I truly don’t even know what that means as neither of them have mouths, vocal chords or a central nervous system. Fiat currency (just like any currency) is merely an exchange mechanism. If you want to put the decline in the value of the dollar in proper perspective I would suggest to you that you do so in terms of a product. Meaning, if you want to compare the ‘value’ of the dollar from year X and today, try using a few different products that dollars can purchase and compare them. What I would bet you will see is a huge increase in the quality (and therefore value) of those products.

  • VII

    Kelly Ann Pope-

    Bubble Start END Duration % Return
    NDX 1990 2000 9.5 year 2863%
    Dow 1975 1987 12.75 years 333%
    Dow 1917 1929 11.75 years 478%
    Nikkei 1977 1990 12 747%
    GOLD 1968 1980 11.75 years 2315%
    Crude 1968 1980 9.5 years 1270%
    GOLD 1999 20?? 12 years 600+%

    Your going to get hurt with that dogma you call an opinion on Gold.

    I have no axe to grind. Dogma has killed everyone in history who invests in some God of an asset. You are in love with a God who doesn’t give a damn about you or the losses you think you shouldn’t have had.

    Do what you want with this information…the clock is ticking I hope you take the time to see the other side of your position and not defend you sand castle in a rising tide. You will turn around one day and see it’s gone and all the conservative gold bug websites and graphs will have left you.

    I try and see both sides and I’ve owned gold up to 25%. I’m now down to 6% and I will sell it at some point. I treat my investments like my wife treats her tampons. I use them and then throw them away. I hope you do the same and get rid of that dogma of yours. I don’t know too many wealthy clients of mine who defend anything. Hell they’ll sell there kids if they could. Not saying thats good.

  • Different Chris

    That’s really interesting bubble data, I’ve never seen it laid out like that before, thanks

    Perhaps you should start your own blog?

    I’d suggest the name “Investing, Sh*t my wife told me I should stop doing, and Percocet”

  • VII

    Misthos-

    ONe more thing..I can show you a chart of central bank buys of gold during the last Gold bubble and it overlays what the banks and central banks are doing.
    YOu see this as bullish…and miss that this is how bubbles ultimatley get blown up and pop.

    I have no axe to grind. I’m not a fiat follower and gold is not my god.

    I don’t know why people get sucked into investment bubbles but I’ll follow some of the comments here to understand how this happens to good people like yourself.

  • http://kellyannpope.com Kelly Ann Pope

    I repeat gentlemen, I believe it’s not “investing” in bullion, merely not saving money (of course) in the bank and a percentage of cash that is comfortable & adequate is exchanged for physical bullion. And you all know that Fiat paper currency can be printed outa thin air where as Gold can not be. What, then, is fiat money? It’s exactly what we just talked about: money that can be inflated or increased at the push of a button. Nowadays most fiat currency are just blips on a computer screen and it’s easy for the Federal Reserve to create money out of thin air whenever they want to. meanwhile all prices will continue to sky rocket.. the whole point is that your dollar is declining while we bounce around the subject. So I have much better things to do.. and I thank you all for letting me tell you why I feel this is emotional .. where as investments are never to be emotional .. just like tampons (good case in point) you throw them away later.. well that is not the “deal” it is about the children, the grandchildren etc.. one smart guy I know says “it is the prudent thing to do” to have a “store of value” in gold. And if not Gold, then there are many others ways to hedge.. gold is merely one of them.. insuring my assests in gold no matter what the price of gold is. Because the dollar is 100% due to its death bed.

  • VII

    DC-

    To finish it with averages which I should have done.

    Average duration of a bubble is 11.8 years…
    Average % Return is 1009%
    So Gold could go higher..I’m not saying it can’t..I never tell a cocaine addict he will overdose..I have no idea how high his body was made to go. But what I do say is, …that will hurt you..be careful.

    So the duration of Gold has gone past the average but the return is lower. The dynamics are always different.

    Percocet..funny I had to look up what that does. I only liked one drug. I just liked it alot. Too this day I could take a triple shot of espresso and go stratight to bed. no problem.

  • VII

    I get that Kelly…insurance.

    We can go back an forth on some of the stuff you just wrote but wish you the best.

    Hope you help with solutions to the many issues this country is facing. Some great topics here…didn’t mean to lecture you which I did do.

    I’m a little rough around the edges sometimes…me and Trixie probably were cut from the same cloth.

  • VII

    Hans-

    All are + or -..changing based on daily craziness

    GlD-7%
    DBLFX- 6%
    FPACX 10%
    Asia Currencies 6%
    Other currencies 6%…not doing good here as of today.
    SPY-25%..did not sell today which I thought I would close this out for gain. put on 9/6/11
    EEM- 15% 9/6/11 down slightly….
    EEEMS- 10% same..
    PAUIX-4%
    CAsh the rest…

    My big call is the Emerging markets rally….to outperform the SPX…aggressive move.

    That’s where I am today…good year so far…good postition trades…..scared to death of Europe. Feel like I’m surfing in a good swell with blown out conditions…It’s not fun and too piggy back on what Cullen wrote..It seems like a “flip of coin”… what can happen. I frankly am getting ready to get out of the water. I hate these conditions.

    I wish Ray Dalio needed a kidney and I could give him mine…then he gave me all his trades 5 minutes before he made the buys…
    NEED ANYTHING RAY…i’m here for you?

  • VII

    gLD- 7% not GID

  • Different Chris

    Please tell us what is going to ‘kill’ the US Dollar? More specifically, what is going to make the vast majority of people stop paying US taxes? (These two questions are in reality asking for the same question).

  • http://fiatcollapse.blogspot.com Misthos

    When did gold ownership equate with bunker living?

    Why do MMT’ers feel the need to characterize every person that holds gold as some sort of gun toting, bunker living crackpot? I am far from that – I don’t own a gun.

    I guess it’s the easiest intellectual route to take. Characterize the “gold bugs” as silly crackpots, and make yourself seem reasonable and logical by comparison.

    We’re not all Glenn Becks, you know? We all have different viewpoints.

    In my case, my view is that the current system will revert back to gold – it’s that simple.

    You never met me. All you know is that I hold gold, and I believe we are headed for an escalation of global conflicts, and that gold will return in some way to the global monetary system as the current system breaks down.

    How do you respond? You label me a bunker living end of the world crackpot of sorts. Maybe the hysterics are coming more from you guys…. Life will go on after Fiat – I can imagine it – it won’t be the same, but we’ll get by – I don’t think you can. Reversion to gold is not the end of the world. Just the end of the world we knew. Happens all the time in history – live with it.

  • http://fiatcollapse.blogspot.com Misthos

    My reference to gold’s weight is to compare it to current electronic fiat – just mere keystrokes in creation, whereas gold is a real, tangible asset.

    Look at the governments of the world. They pretty much are all in varying states of corruption and collapse. Fiat is the current system they are all manipulating – and badly so.

    But what do all governments, even those militarily, economically and philosophically at odds with each other agree on?

    Gold ownership.

    It’s that simple.

    It’s not about Osmium, or sea shells, or whatever medium of exchange the eggheads want to debate. It’s what they, the central banks and governments of the world determine. They chose gold. Period. That argument has been already dispensed with. That’s all that matters. Your opinion is pointless and immaterial. You can argue about gold ownership all you want. The decision has already been made – long ago and continues today. The current electronic government debt based system allowed the US to extend and pretend for 40 years. Much of the rest of the (mostly western) world enjoyed the ride as well. It’s now over.

    Look at Central Bank buying. It’s not their first choice, but its a choice, or rather, option, they want to keep open. That’s why most of them keep gold.

    Thus, the real debate is will the current system survive this crisis, or will we revert to gold. That’s the debate.

    I really don’t care about anyone’s opinion about gold. It’s the US Treasury’s opinion that matters to me. So long as the US holds gold – and for strategic reasons that may make it necessary to use it soon – I too will hold gold.

    They say don’t fight the trend. I think that’s what all you MMT’ers are doing. You are all fighting a global, historic trend.

    If the current crisis hasn’t opened your eyes on the mismanagement of fiat and mankind’s predilection for the easy way out until mankind is forced back to some sort of discipline it can no longer avoid – then nothing will.

    You can’t debate the future course of MMT without understanding the human psyche. That’s where MMT’ers fail.

  • http://www.pragcap.com Cullen Roche

    I’ve been bullish on gold for years. Where’s the failure?

  • http://fiatcollapse.blogspot.com Misthos

    I don’t understand your post – what failure are you referring to?

  • http://fiatcollapse.blogspot.com Misthos

    I guess I am guilty of painting with a broad brush. Just as some commentators here tag all gold owners as hysterical doomers – I unfairly grouped together all MMT’ers. My bad.

    I want to make this clear – I agree with how MMT describes the system we have today. I wish most people understood it. I only differ with most here on how this crisis will likely play out. I use an interdisciplinary approach to analyzing economics. There are a lot of moving parts in a global economy.

  • Hans

    VII, excellent diversity on your portfolio..You are perhaps a wise man by reducing your Au holdings..

    At the current time, I still worship before my golden idol daily..Forgive me, oh lord…

    Interesting to see you invest in currency…Please, remind me to sit behind you on the express investment bus!

    I appreciate your sense of delightful humor, in this mostly arid environment..

  • VII

    Hans-
    Thank You…
    This gold thing is a doosy.

    I got a call last month that put us out of the bullish gold camp..then data saying the bull market doesn’t end in gold until q1 2013..but I’v seen other data that points to a larger move than where we are seeing it.

    Honestly..I’m tired of talking about Gold. I see both sides. I posted here a short term correction on it but I held GLD. I then got an audible that says keep it.

    With Gold I feel like I’m waiting to jump into a double jump rope and I just stand there making the motion like I’m going to do something.

    My argument on Gold is to not fall in love with it. Some have..I try and point this out.

    If I painted MITHOS as a bunker gold bug and he says he’s not that. Than I treated him the way I hate to be treated. I’m sorry Mithos..I’ll hit you up directly. This makes apolgy #5 for me on this site.

    Gold is like politics. You mention you don’t like it..you get lectured on why your wrong. You say you love it and you get lectured on why it’s nothing.

    I own it. I like it less and less it goes up. I was told were no longer in the bullish camp. SO count me out of the bullish camp on gold. But I still own it. Not as much as I did..25%-6%.

    But..i’ll probably avoid Gold comments. I’m agnostic about most things.

  • VII

    Misthos-

    If I painted you as a bunker gold bug..and you say your not. Than I am guilty of treating you the way I hate to be treated.

    I’m sorry. I’m getting better at this but went to far.

    I own gold. 25%-now 6%. I like it less than you. I’m not in the bullish gold camp anymore but still own it. Something may change. Hell I just found out I like mustard after never hating it. I’m always open. The gold conversation is to heated for my blood.

  • len

    “More specifically, what is going to make the vast majority of people stop paying US taxes?”

    1. Worsening unemployment? (Moderate likelihood)

    2. Living expenses higher than income? (Very high likelihood)

    3. Thinking you can get away with it? (Very low likelihood)

    4. Migration to Costa Rica (I’m not saying)

  • Hans

    Another lucid reply, VII! You are humble and self-effacing, both superb qualities…

    No asset class is without liabilities and that includes Au…

    Being marriage to anything means being divorced from reality..

    I am Old, believe in Gold, and God is my trusted adviser..

  • Meteorlady

    I am a small business owner and I CREATE JOBS. It is totally laughable that the government believes it creates jobs. Governments (city, county, state and federal) hinder me from growing my business every day with their excessive taxes and regulations. Until they cut back on the control and give states back their rights, mu business will continue to flounder and never grow enough to hire.

  • Meteorlady

    Here’s some real tips. Buy silver and gold and put it away. Buy items like liquor, medicines, butane canisters, etc. and other items that can be bartered. I have a food supply put away for a year, and I have a large vegetable garden which I share with neighbors. I am pretty self sufficient except for energy – where I live they won’t let us have a wind generator in our backyard – or solar on the roof. I do have some portable solar generating devices and I recycle the rain water I can collect to my garden (rain is at a premium this year as we’ve had none). I’m well off, I’m not doing this because I have to, I’m doing this because my food supply is healthier (o veggies and fruit from Mexico) and I have somewhat insulated myself from a falling dollar and higher food costs.

  • Meteorlady

    Goerge Soros has been over in Europe campaigning to end the US dollar as the world reserve currency. That will be a huge blow. Second, if we do not implement another spending program, leave spending at it’s current levels, and do not get involved in any other sovereign country’s business, we will be completed broke in 20-25 years. All we will be able to do is pay the interest on the DEBT. That’s why politicians won’t talk about the debt. That’s why the current commission appointed by Obama is just looking at cutting FUTURE spending – that’ FUTURE…. not spending across the board right now today. Not cutting programs and agencies, not scaling back the size of the federal government, nothing else. Meanwhile the FEDs have been printing money non-stop and your dollar is worth about 20% less than when Obama took office. That means that every single man, woman and child in this country has been taxed 20% without even knowing it.

    To think that we can keep robbing Peter (taxpayers) to pay Paul (entitlement hogs and government workers) is simply stupid and beyond responsible.

  • Meteorlady

    Different Chris… When Nixon took us off the gold standard he did so because LBJ and the rest of the liberal/socialists had created so much DEBT with their programs that we were unable to pay the payments on those debts using gold backed money. The gold standard made it possible for us to live within our means, with small amounts of inflation and a more robust economy. Once off the standard the Feds started printing money to service the debt and the money became worth less (devalued). Today the Federal Reserve has created more money and as a result our dollar is worth less and less (20% less since Obama took office). Inflation and dollar devaluation is a scam on the taxpayers in that it’s a hidden tax on every member of our country, including our children.

    The feds print the money and hands it directly to the banks. The banks receive the dollar and it’s worth the current dollar value. Once they start handing it out, and the money gets into the economy, the dollar devalues based on the amount of money in circulation. So, the banks are raking in a lot of profit and the rest of us are getting the shaft.

  • http://hitormiss.yolasite.com/hit-or-miss.php Trixie

    Government doesn’t create jobs. Neither do businesses. Consumer demand creates jobs. That said, I am assuming your company is floundering because you are forced to turn customers (and demanding ones at that) away at your door due to your tax liability. In which case, I am confident someone else will pick up that slack. And they will hire people to do it.

  • len

    “…where I live they won’t let us have a wind generator in our backyard – or solar on the roof.”

    I believe federal law mandates free choice to install solar panels and satellite dish receivers anywhere in the US.

  • Rich

    I am long MREs and S&W.

  • Was this for real?

    Posted by VII

    “Weak people like me…

    Oh you mean the linebacker who played for the Miami Dolphins..
    All-American..team captain…started his own business..helps out his community…goes into crappy areas of L.A to help the drug addicts and poor.
    Buddy…and I mean this politely…if you were next to me you would not be the lastmanstanding….no one you knows me would disagree.”

    Lol fo’ real!?

  • theta

    “Meanwhile the FEDs have been printing money non-stop and your dollar is worth about 20% less than when Obama took office. That means that every single man, woman and child in this country has been taxed 20% without even knowing it.”

    Shouldn’t that actually mean that every one would owe 20% less, rather than having been taxed 20%? Why are you complaining then?

  • Real Money

    That is right gold is nothing, will never be anything, run from it… and heaven forbid don’t buy and hold it. Just by the virtue of when gold was $35 per oz it bought the same amount of food and housing should indicate that it is a better way to save than filling a tin with paper (Money ?). And like a savings account there is always a time to withdraw… That time is when you need the money. Gold is not evil … Gold is not easily spendable but, it does hold it’s value against other commodities. Buying gold now is like buying your food and shelter for years down the road at today’s dollar value.

  • http://www.bing.com/ Gracelynn

    Call me wind because I am abusoltely blown away.