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Richard Russell:  “What to do?  I've never had such an overwhelming feeling that the cards are stacked against us, the retail or ‘non-professional’ investors.  The bond market is held up by the Fed.  The stock market is levitated by the Fed's QE.  The gold market is rigged by big banks and an assortment of manipulators.  The art and jewelry markets are owned by the world's billionaires.  Farm land is owned by the wealthy.  So again, what do we do?  Or what should we do?

One thing we can do is side with the Federal Reserve and get in the stock market with a position in the Diamonds (DIAs).  Or we can buy and hold physical gold, and hide it in a very secret place.  We can stay away from bonds and anything else that is extremely sensitive to interest rates.  Or last and surely the easiest on our nerves, we can sit on the sidelines with Federal Reserve notes (dollars) and some gold and await developments.  Incidentally, I understand that you can buy some heavy gold chains (you can call it jewelry), and this is one interesting and safe way of owning gold.

Lately, I have heard of several advisors who have given up and quit the business because they no longer trust the manipulated financial and market data.  Not surprisingly, stock market studies they have depended on for years no longer work in these manipulated markets.

An idea that comes to mind is based on my old friend Mary Zweig's axiom -- “don't fight the Fed.”  It's obvious that the Fed wants the stock market to head higher, and you might just go along with the Fed's wishes.  Of course, the problem here is that we're not dealing with a normal or a free market, we're dealing with a manipulated market, and as such we're at the mercy of the manipulators.  You might have a big position in the DIAs, and you're spending a good deal of time reading everything you can find on the Fed's intentions.  Or you might find yourself listening to the all-night news, just in case there's something about the Fed easing up on QE.

I'm not saying that you can't make money investing with the Fed, and I'm not saying that the Dow can't rise another 2500 points -- what I am saying is that in almost every area, we are now dealing with manipulated markets.  And investing in rigged markets, I find, is hard on the nerves.

A sad example of what's going on is the recent bear raid on gold.  Large quantities of “paper gold” were sold short on the Comex, after which bullion banks spread nasty rumors about “the end of the gold bull market, and thousand dollar gold.”  This drove the price of physical gold down below support levels, at which time large interests scooped up “cheap, underpriced” gold.

Frankly, I can understand a subscriber jumping into the stock market and picking up some DIAs, and over the next year that might turn out to have been a brilliant move.  My own inclination is as follows -- When you don't know what's happening, don't do anything, because anything you do might turn out to be stupid.  If you're an amateur watching a poker game being played by professional gamblers, just keep watching.  You'll probably be better off watching the game than joining the game.

Below, GLD, an ETF for gold, could be building a base.  The resistance is seen at 145.  Now that the manipulators have scooped up cheap gold, they may want gold to head higher.

Russell musings -- As of Friday's close there were six distribution days on the S&P and four on the NASDAQ.  In other words, there was quite a bit of selling or profit taking by institutions during the recent two or three weeks.”

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© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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Eric King

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