On the heels of continued volatile trading in key global markets, the Godfather of newsletter writers, 90-year-old Richard Russell, warned about an event that will signal the start of a historic bear market that will destroy the current economic system. The legend also discussed gold, silver and a trapped Federal Reserve.
Richard Russell: "Investor's Business Daily headline, 7/31/15: 'Fed Rate Hike Probability in September Increases to 50%.' From every side, it appears that the Fed is more than anxious to raise the federal funds rate. This is based on the Fed’s perception that the economy is rosy and growing stronger.
However another Investor's Business Daily headline from the same issue states: “Worst Expansion Since WWII Gets Even Worse.” According to John Williams, the US economy is slipping back into recession. In the face of this, the mistaken Fed plans to raise rates.
Turning to the stock market, I note that the Industrials are down 92 to 17,598. The Transports are up 25 to 8416. The Nasdaq is down 13 and only 115 points above the critical 5,000 level. Gold is down 9.3 to 1085.8, while silver is down 27 cents to 14.48.
A Trapped Fed
Despite all the forecasts for a rate hike by the Fed, the Fed has so far refused to pull the trigger. Evidently the Fed knows more than it is announcing. The actual fact is that the Fed is not convinced the economy is strong enough to handle a rate increase.
John Williams continues to warn about hyperinflation. One sign of hyperinflation would be a collapse of the US dollar, followed by rising silver and gold prices. The Fed, in its frenzy to raise rates, believes its own propaganda to the effect that the US economy is improving. We will know in the next few weeks if this is true.
Trigger Of Historic Bear Market Will Destroy The Current Economic System
From my standpoint, this is the strangest period that I have gone through since the 1940s. The Industrials are declining faster than the Transports. If this continues, at some point the Industrials will touch the Transports. When that happens, I believe a bear market will be signaled, as both Industrials and Transports accelerate on the downside.
I expect a brief period of higher prices which will draw in the amateurish retail public. This brief breather will be followed by an historic bear market that will tear apart the current economic system. It will eliminate the Federal Reserve and result in a new workable economic system based on the old standards.
The new system will eliminate fiat money while silver and gold will recapture the basis of tangible money.
I Advise People To Buy Physical Silver
Silver is selling below the cost of production. Again, I suggest to subscribers to purchase the monster boxes of silver coins." I would urge all KWN readers around the world to subscribe to Richard Russell's 90 years of wisdom and remarkable writings at Dow Theory Letters by CLICKING HERE TO SUBSCRIBE.
***KWN has now released the extraordinary audio interview with Bill Fleckenstein and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW. Fleckenstein discusses the gold and silver markets at length, why the stock market will collapse, what surprises to expect and much more.
***KWN has also now released the remarkable audio interview with Dr. Paul Craig Roberts and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW. Dr. Roberts discusses a world on the edge of chaos, the turmoil in the gold and silver markets, what surprises to expect and much more.
***ALSO JUST RELEASED: Greece, Gold, And Are People Really Prepared For A Bank Collapse? CLICK HERE.
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The audio interviews with Bill Fleckenstein, Dr. Paul Craig Roberts, Robert Arnott, Eric Sprott, John Mauldin, Stephen Leeb, Egon von Greyerz, Nomi Prins, Gerald Celente, Andrew Maguire, Michael Pento, Rick Rule, David Stockman, Chris Powell, Dr. Philippa Malmgren, Marc Faber, Felix Zulauf and Rick Santelli are available now and you can listen to them by CLICKING HERE.