As people continue to digest breaking news from around the world, today the Godfather of newsletter writers, 90-year-old Richard Russell, warned of a world on the edge of chaos. Russell also spoke about his memories from one of the most important days in world history nearly 70 years ago.
Russell Remembers VE Day From 70 Years Ago Like It Was Yesterday
Richard Russell: "It’s 1945. It’s VE Day, and Germany has surrendered to the Allies unconditionally. I’m fast asleep in my tent in Senegalia, Italy. Suddenly I hear the sound of drums, and the very ground beneath me begins to throb. I rush out of my tent and ask the nearest officer what’s going on. He tells me that the war in Europe is over, and it’s celebration time. I look ahead of me and there I see a strange sight. “What’s going on?” I ask.
The officer smiles and tells me, “Those are the Swazi warriors. They’re in the British army, and they’re celebrating that the war is over.” They’ve all kept their native uniforms in their barracks bags. Most of them have had a few drinks and now they’re doing their native victory dance. Four of them (not shown) are beating on drums. The dance lasted from morning till mid-afternoon.
"They're Probably Sending Us To The Pacific. God Help Us"
Following the dance we all got together and polished off six bottles of cheap Italian Spumonti. The Swazi celebrated with us. They spoke broken English interspersed with what I thought was a bit of Swahili. I was relieved that the war in Europe was over, and my thoughts nervously turned to the war in the Pacific, which was still very much on all our minds. “Well, I made it through Europe,” I thought. “And I’m sure they’re probably sending all of us to the Pacific. God help us.”
(This picture was taken with my little Brownie camera.)
World War II lasted from 1939 to 1945, six years. The great bull market that started at the 2009 lows has lasted for six years, and everybody knows it is now long in the tooth. Analysts are now vying with each other as they attempt to call the top of the bull market. This is a thankless job, and Mr. Market is having fun with it. Some professional selling is going on at this time, as seen in five distribution days in the S&P and five in the Nasdaq.
I suspect the market is stuck in a trading range. As I write, an hour before the close, the Dow is up 53, well short of a new record high. And the Transports are diverging, down 139 as I write. The Nasdaq is down a fraction, but still above the 5000 mark. Gold is up 7.7 to 1190.1. Gold is acting nicely and so far it has not been whacked by the large army who have done their best to keep gold from breaking out into a new bull market.
Fed Playing A Dangerous Game
Meanwhile, the Fed is playing the game of keeping short rates at zero while insisting that the economy is rising. Of course we know that if the US economy was as good as the Fed and the government claim, the Fed would already have raised rates.
I continue to believe that in order to boost the middle class and employment, we will have to go back to the “New Deal” of the Great Depression days. America’s infrastructure is falling apart, and this cries for the ideal way to employ people. Ultimately I think the two parties will get together and go back to the make-work policies of the Great Depression’s New Deal.
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A World Without Fear
Back to one of my favorite subjects: the search for peace of mind. When people are anxious or disturbed they often turn to drugs. Deaths from drug overdoses have now reached epidemic proportions. It is such a problem the drug antidotes are now being passed out to policemen for distribution and to families where one or more individuals are addicted.
Current entertainment and art often reveal the character of a civilization. Note what movies are now giving us – vampires, zombies, and all varieties of the undead. People today relate to fear and horror. This goes against my dream of a world without fear, and where everybody loves themselves. The absence of fear and anxiety is love. If the human race is to make progress, it will have to learn to eliminate fear.
The Eternal Value Of Gold
In economics, we see nations competing with each other to devalue their respective currencies. The one currency that cannot be devalued is gold. Over the centuries, gold has tended to retain its purchasing power.
I know that many gold analysts are of the opinion hat gold has not yet carved out its ultimate base. I’m not going to add to the futile guessing game, but would prefer to watch the actual progress of the metal. Last week gold avoided it’s usual knock on the head. And I’m pleased to see that Friday’s bullish action is continuing.
I’d say that gold’s support line has moved up to 1190, with 1200 very possibly the new line of support — we will know in a week or so. At the same time silver is up .31, and now trading at 17.04. My best and a fearless future to all my loyal subscriber.
Late Notes — As the market closed, gold (which is still trading) was up 8.3 to 1190.7, about a dollar off its high for the day. The anti-gold element always seems to hit gold around stock market closing time. This has the advantage of gold never closing at the high for the day.
Remember that gold, tangible wealth, is the ever-present enemy of intangible fiat money. Gold will be a recognized currency when fiat money is a footnote in the world history of currencies. Speaking of footnotes, collapsing bitcoin, another intangible "currency," is rapidly losing its followers.
King World News note: I still don't know how Richard Russell survived World War II. It was against all odds for him to survive because he was flying bombing missions against the Nazis and the casualty rate was incredibly high for those brave enough to fly those missions. I would encourage all readers around the world to access Richard Russell's 90 years of wisdom and remarkable writings at Dow Theory Letters
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