As the world continues to digest breaking news out of Greece and Ukraine, the
Godfather of newsletter writers, 90-year old Richard Russell, warned
that a new world currency is on the way but he also spoke about what
will be the biggest surprise about this new currency. Russell also spoke about how this will impact the entire world, including major markets.
Richard Russell: “On
Friday the Dow closed at a new record high. But today it appeared that
the market was consolidating its gains. There are two ways to operate in
a bull market. When we're early in a bull market, dividends are higher
and stocks are relatively cheap, we can take a large position on the
thesis that losses are limited.
Proceed With Caution
However, with the market as high as it
is, and dividend yields low, if we insist on playing with the bull, it
makes sense to move in with a smaller position. If the market continues
higher, you can add to your position. But if the market goes belly up,
you’re out with a small loss.
Gold Waiting On Greece
Gold as I write is holding above its
support level of 1200. It appears to be waiting for either the Fed or
Greece or both. The Greece situation now looks unsaveable. As usual, any
settlement will be put off for as long as possible in the hopes that
some miracle will fix the situation.
Russell Prediction – Expect New (Golden) World Currency
In the meantime, investors looking for
safety and possible appreciation have been pouring into the US dollar. I
fear the dollar has been overdone and is overbought. Where to go next?
Some will forget the dollar and buy the world’s safest currency, which,
as you know, is gold. My prediction – a new world currency will be
created. Gold will be an integral part of the new world currency.
World Choking On Debt – "Inflate Or Die"
The world is choking on too much debt.
There are two choices, the debt can be reneged on, or it must be
inflated away. The least painful method is the one of inflation. Many
years ago, I came up with the slogan "inflate or die." That slogan still
applies. Buy physical silver and gold while they are cheap and readily
available.
Not So Free Markets
For 65 years I've depended on the free
markets to discount the future. Today with the central banks intervening
in the markets, investing is a much more subjective study.
Exter's Pyramid And Gold
I recently read a long article on
deflation versus hyperinflation. The piece drew attention to my old
friend John Exter’s inverted pyramid of asset classes. At the bottom of
the pyramid is gold, the safest of all investments. The problem is that
the world choking on too much credit. The giant mass of credit and loans
is deflationary and is causing deflation.
Gold Repricing And Hyperinflation
Nobody is talking about increasing the
gold portion of the inverted pyramid (see above). To do that would
simply require a reset of the gold price to some higher number.
Strangely, nobody mentions the price of gold. Raising the price of gold
would overnight expand the basis of the inverted pyramid. This would
allow the world to continue on its current path. Ultimately I see
hyperinflation in our future; my advice is to buy physical gold while
it’s cheap and available.
Buy Gold While It's Still Available
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