The
Godfather of newsletter writers, Richard Russell, had a great deal to
say about gold, the markets, China’s plan to take over the world, and
what lies ahead. Here is what Russell had to say in his latest report:
“Frankly, I can't remember dealing with a weird situation like this
before. Strange, we're waiting for new highs in the Averages, and at
the same time we're waiting for gold to break upside into the 1800s.”
Richard Russell continues:
“Let's
be honest. What would we do with our gold if it rallied to 1800 -- and
then above 2,000? Actually, I wouldn't do anything with my physical
gold, any more than I'd do something with my house if the real estate
market got hot and my house was suddenly worth more.
What
would I sell my gold for? Sell it for dollars, for euros, or for
renminbi? Or trade it for a Ferrari? No thanks, if you have physical
gold, don't touch it, sit on it, and save it for a rainy day. When the
economy starts raining, and the dollar collapses, you'll be glad you
have something of value. ‘Patience, patience’ is the right stance.
Facts -- Suppose we decided to stabilize
our growing debts through spending cuts alone? We'd have to cut all
government spending by 31%.
But suppose we decided to stabilize our growing debts through taxes alone. We'd have to raise taxes by an impossible 46%.
Both
of these solutions would wreck the nation. Therefore, neither one will
be on the table. But a combination of both will probably be tried.
But
wait -- suppose there is no political or reasonable answer to our
growing and compounding deficits and debts -- none? Then what? Wait,
there is one answer, and it's the answer that our government will
surely try. That answer is to try to print our way out of the debt
problem. The government will surely attempt to print our way out of
our growing troubles.
The
biggest debt problem is connected with our government health program.
By the year 2050, health programs will chew up about 14% of the US's
entire gross national product. Cutting back substantially on Medicare
is politically impossible.
Thus,
the answer to all the above is for the Federal Reserve to turn to
printing us out of trouble. How will we know when this is happening?
Since wholesale creation of the currency (printing) is inflationary,
the answer is to monitor the dollar and to watch the bonds (which
dislike inflation).
As
the purchasing power of the dollar deteriorates, it will take an
increasing number of dollars to buy one ounce of gold. Thus, when we
buy an ounce of gold, our purchasing power is stabilized. But at the
same time it will require an increasing number of dollars to buy one
ounce of gold. It will also require an increasing number of dollars to
buy anything else.
As
the dollar declines in purchasing power, it will begin to lose its
international reserve status. Foreigners will begin to avoid the US
dollar. At around that time I believe the dollar will face growing
competition from the Chinese yuan. To make matters more difficult, I
believe the yuan will ultimately be partly backed by gold. This will
be part of China's plan to take over leadership of the world.
Throughout
history, the nation with the reserve currency was also the nation with
the most powerful military. This was true of Holland, Spain and most
recently, Britain. When Britain lost its power and military (navy)
leadership during World War II, the US moved to the fore, and, in turn
(Bretton Woods), the US dollar became the world's reserve currency.
The
US's Pentagon is now worried about the build-up of China's military,
particularly its navy. China knows what it is doing. China knows that
if it becomes the world's leading military power and it possesses the
world's reserve currency, it will be the new leader of the world.
沒有留言:
張貼留言