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Russell: “In the Ukraine, ex-KGB operator Putin is playing his game of “who will blink first.” My inner voice tells me that there will be no war in the Ukraine. Putin knows that the most expensive thing that a nation can do is fight a war. And Putin may be a closet economist. I'm a war-hater, so I fervently hope that the Ukraine confrontation can be settled without a shooting (boots on the ground) war. War is extremely expensive, and Putin is obviously aware of that fact. So I'm assuming that Putin and his wealthy buddies are pushing the pressure-pincher as far as it will go -- just short of war.


Prior to WWI, war was considered a glamorous and glorious pursuit with horses and swords and banners as part of the fight. The ghastly wounds and deaths and the arrival of trench warfare and poison gas ended the glory days of the old idea of war. Then came the “Black Swan” of 1918. A lethal version of influenza enveloped the world and 50 million people died -- more died than in WWI. I was a freshman at Rutgers when the word went out that the U.S. needed soldiers.

I enlisted in my freshman year and was called to defend my country before my freshman year had ended. I had no visions of glamour and glory, but it seemed like the thing to do and so ended my Rutgers years. After WWII ended, I entered NYU and from there got my BA as an English major. Little did I know that I would have a career writing -- not the great American novel, but writing about the stock market along with added philosophical thoughts.

My advice -- to remain in silver and gold -- has meant that we have avoided all the recent and confounding worries about the stock and bond markets. As I've repeated over and over again -- nothing is worth losing our peace of mind over. Peace of mind is the single most valuable present that you will ever receive during your stay on this good earth.

Finally, the thing I have been predicting and the item that I have been waiting for has come. A few minutes before the close, the Transports were higher by 108 to 8516.6. It appears to be almost certain that the Transports will close at a new record high -- unconfirmed by the Industrials. In the face of the new unconfirmed Transport high, if the stock market turns down now, the situation could get ugly. I refer again to the Transport low of 7983 from June of this year. If this low is violated the picture could turn very ugly.

Precious metals: Gold is down 21.6 to 1265.8, as it continues to build its huge base. From the standpoint of gold bulls, I’d like to see gold stay in its trading range of 1200 to 1400. From what I understand, China continues to accumulate gold, and the lower the price of gold, the better China likes it.

As for the fundamental picture it’s a question of whether John Williams of Shadow Statistics will be proven right. According to Williams, the US economy is still caught in a recession that started in 2008. So far, I believe the government has been lying to us and that Williams is correct. If it turns out that we are still in the great recession, I am afraid that all hell will break loose. We should know the answer by the end of September, although the stock market may provide us with the answer earlier.

I believe we are at one of the great inflection points in stock market history. It's all very fascinating, that is, if you have the stomach for it.”

To subscribe to legendary Richard Russell’s Dow Theory Letters CLICK HERE.

© 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.

IMPORTANT - KWN has many more interviews being released today.

The audio interviews with David Stockman, Egon von Greyerz, Rick Rule, Dr. Philipa Malmgren, James Dines, Michael Belkin, Dr. Paul Craig Roberts, Andrew Maguire, Art Cashin, Michael Pento, MEP Nigel Farage, and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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