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Russell: “I've been talking about the good recent action of gold and silver, thinking maybe the “news” will get out about the US's unaudited and possibly missing reserves of gold.  But now with trouble in Israel, trouble in China-Japan, trouble in Crimea and further trouble from that maniacal, homicidal leader in North Korea, I wonder if we could be on the edge of another War? 

There's nothing more expensive for a nation than fighting a war, and the nations that fight a war usually sink heavily into debt -- which is why gold rises on war rumors or during a war.  And I sincerely hope that visions of war are not the reason for the recent “firming” of the precious metals and mines.  Again, I urge my subscribers to buy some silver.  From what I gather from charts and my studies, it's time to own silver.

By October 1, the Fed will have completed its exit from QE and the market will be, to some extent, on its own.  However, the Fed will continue its zero interest rate policy (ZIRP) well into 2015.  I think the real trouble will be triggered when the Treasury auctions off a batch of its bonds -- and there are no bidders.

The last two generations are the only two generations in US history that have never experienced hard times.  Can this continue?  The US debt situation suggests to me that something new may be in our future -- at least something that people 60 years or younger have never seen.  If the “great corrective bear market” does materialize, I think it will have to do with the dollar, and the US dollar as the world's reserve currency.  I believe the decade ahead will supply us with a few surprises that may reshape our world.

Note -- In reading the latest issue of Barron's, I saw not a word about silver or gold and not a word about the US's unaudited “mountain of gold.”  C'mon Barron's here's a blockbuster story, waiting for you.  All the smart guys know about it but no national publication has the nerve to touch it.

I have been asked if, during my era of writing Dow Theory Letters, there is anything I am proud of?  There is -- Since 1958, when I started writing, I have never allowed my subscribers to be in the market in a primary bear market. And so speaking, I tell my subscribers that the position I advocate today is this -- own physical silver and gold with a small cash position, which you will need for daily expenses.

As I wrote the last sentence, something made me think of my life in NYC during the 1940s.  In those days I used to buy a full course Chinese dinner in Manhattan for 65 cents.  Too bad Ben Bernanke and Janet Yellen weren't around to remember those times.  My favorite Chinese restaurant in those days was at 13 Mott Street.  See, I even remember the address.  And there was the great Washington Market, where I could buy a dozen oysters or clams (shucked while you wait) for 35 cents.  At the more expensive NYSE restaurant, a dozen clams cost 65 cents.

Inflation, it's a wonder.  Speaking of inflation, I have the feeling that inflation is now accelerating and into “middle gear.”  Everything is starting to move up in price.  I can see it in the supermarkets and in the big-box stores (Walmart, Target) -- and in the outfits going out of business because they can no longer pay the rising rent.

Below -- Gold forming a large bottom.  A bullish breakout will be triggered if the 1340 box is hit.

Silver -- bullish signal would be triggered at 23.  And an extremely bullish signal would be given at the 26 box.

Below, HUI, the gold bugs index, building a huge base.  It turns bullish at the 240 box and extremely bullish at the 264 box.  This index is a modified equal dollar weighted index of companies involved in gold mining.

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© 2014 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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