RICHARD RUSSELL: BUY SILVER
Like myself, Richard Russell had been vocally skeptical about the parabolic surge in silver prices. But he isn’t a believer in the silver theory. Russell says the recent correction is healthy and he feels as though the recent consolidation is setting the stage for the next leg up. In his latest Dow Theory Letter the investment legend explained why he’s bullish again about silver:
“Silver — According the Constitution of the United States, only gold AND silver are money. Silver is a lot cheaper than gold, and for a while the “crowd” rushed in to buy silver as a ” safe haven substitute” for gold. Silver turned into a speculative bubble, and when the bubble broke, silver suffered a crushing drop from a price of 49.75 to 32.
I wrote that silver’s upward post-crash correction might surprise most silver-haters and silver shorts. As I write silver has rallied to above 37. The bull market in gold is still very much intact, and I believe gold will take silver UP with it.
Remember I said that during recessions, silver is treated as an industrial metal, but during periods of inflation silver is treated as a monetary metal. With inflation built into America’s future, I see silver following gold to higher levels. And I see the public once more rushing in to buy silver as a safe-haven currency against a shaky dollar.
Below I include a daily chart of silver, going back two years. Like gold, silver seems to respect a 150-day moving average, which I have drawn on the chart (blue line). Also, note that silver is still severely oversold, as per RSI.”
“Confession — I had sold much of my silver prior to the big break (I didn’t like the parabolic action of silver and the accompanying public excitement), but I have changed my mind about silver. Now that silver is trading above 37 again, I like it and suggest positions in SLV and CEF.”
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.
Follow Me:
40 Comments
If you are a speculator or “serious” investor then you probably should not mess with silver. It is indeed a very volatile and undoubtedly manipulated market. It is a very small market as well (which lends itself to ease of manipulation). If, on the other hand, you are interested in preserving what little value your paper currency has at the moment, then you should look at possessing the physical metal. Interestingly enough, U.S. gold and silver Eagles can be taken out of the country at face value (i.e. one $50 gold eagle is worth about 1530 Federal Reserve Notes right now). I suspect some of the wealthy elite set it up that way for a reason (wink-wink). Furthermore, when you exchange Federal Reserve Notes for U.S. Eagles, there is no sales tax in most states (not so with privately minted gold and silver rounds or bars). Let’s face reality folks: the Federal Government is insolvent without “quantitative easing” (i.e. monetary inflation). Putting more “legal tender” into circulation will necessarily cause commodity prices to rise. Maybe not all at once or even predictably, but they will rise and silver is a commodity. If you think that the Federal Government and the Federal Reserve can’t devalue the 3.6 cents remaining in each Federal Reserve Note by another 96.4%, then I’ve got a nice bridge I want to sell you.
Read RR for many years, actually grew up with his letters coming to our home before the internet! Say what you will about the man, he has been right with his PM call. Don’t subscribe anymore.
Learned about charts, resistance etc from a brilliant man who made millions when the market was not as much of a crap shoot and individuals actually did the trades! Now with the BS computers and Institutions and their games, fahgetaboutit. Trading that is, still ok with some l/t stock holdings.
I have been buying physical gold and silver for several years. I also own a Gold Fund for exposure to miners.
Along with agriculture and oil, that is IT for stocks. No matter what everyone is going to need food and energy.
There is no doubt we are is deep trouble with the national debt and the fiat/paper money is buying less and less. Personal debt too, with the problems in real estate and jobs! The recovery is not happening and it looks to be years before and if it happens. With zero faith in our politicians and institutions I want something that owes nothing to anyone, the oldest form of real money, Gold and Silver. Buying some silver eagles and libertads, 50 pesos Gold coins and gold eagles when I can.
I am still a buyer here and there for savings and retirement. Rather get my bullion and put it in the vault than see the pathetic interest rates with money markets. The stock market is like going to a casino, little faith there too.
I do sell coins when we need cash for an emergency or I buy a ‘collectible coin’.
I am still amazed at how many people do ot get it with gold and for that reason as well as the China factor, the market for PM’s (gold and Silver) have a long way to go. No matter what, Gold and Silver should be a part of every individuals assets. Good Luck to us all!!
Forgot to mention- The silver correction in large part was due to margin requirements being changed!