On the heels of continued volatile trading in key global markets, the Godfather of newsletter writers, 90-year-old Richard Russell, warned that this grand experiment will end in disaster. The legend also discussed his concerns about China's stock market crash and why he believes gold is now at the end of its bear market.
Will China's Bear Market Envelope The World?
Richard Russell: "As subscribers know, I am rooting for the US to come out of this complex situation alive and better than ever. The Greek catastrophe is giving way to the Chinese tragedy. The Chinese stock market is falling apart. The question now is whether China’s bear market will envelope the world.
As I write an hour before the close, the US market continues to hold up. The Industrials are 600 points above the critical 17,000 level and the Transports are almost 300 points above the 8,000 level. The Nasdaq is holding above 5,000. Gold is down 1.7 to 1095.2 and silver is up 2 cents to 14.63.
Gold Ending Its Cyclical Bear Market, Ready To Resume Long-Term Uptrend
With gold probably near the end of its bear market, technicians are now writing more and more about gold. One way of looking at gold is as the anti-dollar.
Economist John Williams continues to insist that the US economy is sinking into recession. Janet Yellen has practically guaranteed that the Fed will bring on the first rate rise by December. If the year ends and the Fed has still not introduced a first rate increase, the thought will be that the Fed, despite all its propaganda, does not think that the economy is strong enough to handle the first rate rise.
This Grand Experiment Will End In Disaster
Debt tends to be deflationary since it requires relatively large amounts of money to carry debt, much less pay it off. A living organism cannot continue to inhale, organisms must exhale as well. This is the simple explanation that the Fed does not understand. The Fed inhales to the choking point and when the choking point is reached, instead of exhaling, the Fed inhales again. The Fed believes that it can inhale endlessly (bull market) and never exhale (bear market)." 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.
***ALSO RELEASED: Bill Fleckenstein – This Will Cause A Radical Shift In Global Markets, Plus A Bonus Q&A CLICK HERE.
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