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Expect the Unexpected

Richard Russell snippet
Dow Theory Letters
Jan 10, 2011

January 7, 2011 -- "I place economy among the first and most important virtues and public debt as the great danger to be feared. To preserve our independence, we must not let our leaders load us with perpetual debt. We must make our choice between economy and liberty or profusion and servitude." Thomas Jefferson.


I have a strange obsession -- or let's call it a ritual. I add up numbers on license plates and on specific dates and on names. For instance, we're now entering the new year, and the new year started out 1-1-2011. This adds up to 6, which is not in the Fibonacci series. The Fibonacci series runs 1, 2, 3, 5, 8,13, 21, 34, 55, 89 and so forth. Since this year is outside the Fibonacci series, I expect this year to be an odd-ball year, rather than a normal year. We must be ready for the unexpected. In brief, Russell says, "Expect the unexpected. This year might even be a black swan year."

A black swan? What is that? It's a game-changing event that arrives seemingly "from nowhere." Examples, a war breaks out, a president dies, a nation defaults, a plague ravages the world, the stock markets of the world crash, a warning message from outer space is flashed on the computers of the world.

Certain events are now in place, events that have never been seen before in human history. For instance, we are dealing with debts so monstrous, so huge, that most people can't fathom them. The national debt of the US is now over $13 trillion. Ask the average American to describe what a trillion is. When I was a boy, big debt was expressed in millions of dollars. Later it was expressed in billions. Today sovereign debts are expressed in trillions. A trillion is beyond the ken of most people.

Today, well over one-third of the world's population is outside the so-called Western influence. The Judeo-Christian sector of the world's population is a minority. The Muslim community is huge, and it has moved heavily into many European nations. The radical Muslims intend to express their world leadership. They have one major advantage. They use suicide as a tool in an undeclared war.

News today is instantaneous and international. Dictators in North Korea and Burma and Iran and Africa are no longer safe in that they can no longer keep their populations ignorant and in slavery.

There is a huge disparity between the wealthy and the poor. The poor greatly outnumber the wealthy. This has all the ingredients for revolutions in the age of instant and world-wide communication.

A large segment of the women of the world live in virtual slavery. This is changing rapidly through international communication. Even Saudi Arabia is being forced to change its prehistoric and brutal attitude toward women. I might mention that the corrupt and dictatorial government of Saudi Arabia is sponsored by the US and its military, and the reason is -- oil.

Almost everything I read about the stock market is based on current fundamental economic news. But the stock market does not operate on current news. Very few advisors are strict market followers. They ignore the news and are strict market technicians. Bob Prechter of Elliott Wave and Joe Granville of the Granville Market Letter are two of such advisors, and you can add Richard Russell. All three of us are suspicious if not bearish on the market, based on what we see in the market action.

All the above makes for one hell of a 2011. Expect the unexpected, says Russell.


Richard Russell
website: Dow Theory Letters
email: Dow Theory Letters

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