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Rick Rule continues:


“Bear markets like this are the cause of bull markets, and the bull market moves are so extraordinary.  But by judiciously and aggressively deploying capital in the 1990, 1991, and 1992 bear market, when the snapback came, the fact that we had been able to participate aggressively in private placements with long warrants, it meant that the capital gains we enjoyed were so extraordinary that as I said in my last interview, my capital gains tax bill in 1996 was greater than my entire net worth at the beginning of that market. 


And it wasn’t because my net worth in 1991 was low.  I had a reasonably large sum of money....


Continue reading the Rick Rule interview below...




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“But these types of extraordinary gains, for investors with the capital and courage to take the risk, are the thing that people who are willing to speculate have to bear in mind.


I don’t think there is any doubt whatsoever that we are in a secular bull market in resources.  We are in this bull market for two powerful reasons.  One reason is, despite the fact that there is US dollar strength right now, worldwide the major currencies are involved in the devaluation war.  This the reality of what is happening.  If they deliberately devalue the denominator, at least the nominal price of ‘stuff’ goes higher over time. 


But the second reason is even more powerful because it’s a market, not a government, and that reason is political liberalization of the 3rd world.  As people become slowly more free, they become rapidly more rich.  Look at China:  30 years ago Chinese leadership decided that to be rich was glorious.  As a consequence of unleashing the human potential in China, GDP per capital in 30 years is up ten fold.  That’s really what is driving the commodities market.


Investors need to understand that increases in per capita consumption at the bottom of the demographic pyramid is what drives things.  When poor people get more money the things that have utility to them are things that are made of ‘stuff.’  It’s important to remember that.  They become much more energy intensive, calorie intensive, materially intensive, and, again, that’s what is driving this market.


What we are facing right now is simply a cyclical decline in a secular bull market.  It’s very important for investors to understand this.  It’s healthy and it’s normal.  So you have these types of retrenchments in the market, but the moves out of the retrenchment are incredibly sudden, volatile, and very pleasant in terms of portfolio gains for investors who properly position themselves.  Right now we are looking at just such an opportunity, one of the greatest in history.”


© 2013 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.


The interviews with Rob Arnott, James Turk, Jim Sinclair, John Embry, Gerald Celente, Dr. Stephen Leeb, Rick Rule, Ben Davies, Andrew Maguire and Marc Faber are available now.  Also, be sure to listen to the other recent KWN interviews which included Egon von Greyerz, Felix Zulauf, Eric Sprott and Art Cashin by CLICKING HERE.


Eric King

KingWorldNews.com

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