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 covered what will be the biggest surprise about this new currency. Russell also described 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
I suspect that the US economy is not nearly as good as we are told, and as this information becomes news, there will be a rush out of dollars. The money will be put into the only safe currency, which is gold. In closing, I’ll repeat that my subscribers should buy physical gold while it is cheap and available.” You can access Richard Russell's 90 years of wisdom and remarkable writings at Dow Theory Letters by CLICKING HERE TO SUBSCRIBE.
***ALSO JUST RELEASED: This Will Create A Hyperinflationary Spiral And A Massive Panic Out Of The Dollar CLICK HERE.
© 2015 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 audio interviews with Felix Zulauf, Andrew Maguire, John Mauldin, Egon von Greyerz, Dr. Paul Craig Roberts, Gerald Celente, Lord Christopher Monckton, Michael Pento, Bill Fleckenstein, David Stockman, Dr. Philippa Malmgren, Stephen Leeb, John Embry, Rick Rule, Rick Santell and Marc Faber are available now. Other recent KWN interviews include Jim Grant — to listen CLICK HERE.